South Africa’s National Treasury will scrap a proposed tax increase that threatened to rupture the nation’s coalition government. The rand rallied.

South Africa on Thursday scrapped plans to raise value-added tax after a political backlash that threatened the stability of the ruling coalition government. The proposal to raise VAT by 1 percentage point over two years,

Spread This News BBC Enoch Godongwana’s decision came after the second-biggest party, the Democratic Alliance (DA), threatened to quit the government, warning a VAT hike would hurt the poor the most.