‘I’m not going anywhere!’ – Godongwana

Godongwana

Cape Town – Finance Minister Enoch Godongwana says he will not resign despite calls for him to step down following the government’s reversal of a planned value-added tax (VAT) increase.

“My job is to introduce money bills – nothing says they must be popular,” the report quoted Godongwana as saying on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.

The Economic Freedom Fighters (EFF) on Thursday called for the minister’s resignation, accusing him of endangering South Africa’s economy following the controversial VAT hike saga.

Although the National Treasury reversed the proposed increase — which would have raised VAT from 15% to 15.5% on May 1 — the EFF said the damage was done and labelled the budget process as “misguided, reckless and unconstitutional”.

The party, which joined the legal challenge against the hike as an intervening party, insisted that the reversal did not go far enough. They demanded a complete withdrawal and reset of the national budget process.

The EFF argued that the Treasury’s focus on a rigid fiscal framework ignores South Africa’s urgent needs: job creation and economic recovery.

“South Africans need jobs and economic growth urgently, and the state is the only institution with the capacity to respond — yet the National Treasury remains obsessed with an unscientific fiscal anchor strategy that will only plunge South Africa into a deeper crisis.

“The EFF calls for the immediate resignation of the Minister of Finance and the Director-General of the National Treasury. This entire budget fiasco should be a reflection for the Minister of Finance and his Director General that they are out of depth and pose a threat to the economic stability of the country and, by consequence, are a threat to the livelihoods of South Africans,” the EFF said.

The VAT hike, intended to raise state revenue, faced resistance due to sluggish economic growth and public dissatisfaction with rising living costs.

The reversal creates a 75 billion rand gap in the budget, prompting Godongwana to draft a new fiscal framework to address the country’s revenue and spending challenges.

The outcome of this framework will be closely monitored by S&P Global Ratings, as a credible plan could lead to a credit rating upgrade for South Africa, while a poor result could increase borrowing costs and lower investor confidence, Reuters reported. 

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