Cape Town – Tensions are rising ahead of Finance Minister Enoch Godongwana’s revised budget speech, with opposition parties strongly opposing any increase in VAT.
The Democratic Alliance (DA), part of the Government of National Unity, argues against tax hikes on an already struggling economy and advocates for better revenue collection instead.
Godongwana’s proposal of a 2% VAT increase aims to address a R60 billion budget shortfall.
DA spokesperson Karabo Khakhau emphasised that VAT hikes would disproportionately impact poor South Africans and the middle class, who are already facing significant financial struggles. The DA firmly opposes any tax increases.
On Wednesday, 12 March, the Minister of Finance, Mr Enoch Godongwana, is scheduled to deliver the 2025 Budget Speech at 14:00 in the National Assembly temporary Chamber, the Nieuwmeester Dome in Parliament.
Minister Godongwana will also introduce the Appropriation Bill and… pic.twitter.com/tDhuzQ06Tw
— Parliament of RSA (@ParliamentofRSA) March 11, 2025
“South Africans cannot afford any VAT hike at all, any tax hike at all – whether it be VAT, personal tax, or corporate tax. We know very well that the people who are going to feel the hardest pinch of a VAT increase right now are poor South Africans and the middle class,” SABC News quoted Khakhau as saying.
“Poor South Africans who are mostly unemployed and are already battling to put a slice of bread on their tables. And for the middle class who are already choking in debt, defaulting on their credit payments and are unable to live a life that is one of dignity. We do not want it. The Democratic Alliance will never be in support of it.”
On Monday, uMkhonto weSizwe (MK) Party members and supporters took to the streets and marched to the offices of the South African Reserve Bank (SARB) to protest the proposed 2% VAT increase.
The party expressed concern over the economic strain that the proposed increase would cause on low-income households and small businesses, as the party said the government’s plan for zero-rated foods does little to alleviate the financial stress on citizens, TimesLIVE reported.
“We are not opposed to the zero-rating of some foods, but we are saying that it is not enough. There shouldn’t be a trade-off between zero-rating food and increasing VAT. Increasing VAT brings inflationary pressure, especially on poor people, who not only need food but are also burdened with other essential costs such as transport and electricity. This thing about zero-rating the food basket is generally a smokescreen,” MK spokesperson, Mzwanele Manyi said.
Follow African Insider on Facebook, Twitter and Instagram
Picture: Pixabay
For more African news, visit Africaninsider.com
Compiled by Betha Madhomu
