Although Finance Minister Enoch Godongwana announced that Value Added Tax (VAT) will only increase by half percent in 2025 and another half percent in 2026, various political parties are still aggrieved by his intentions.
Parties which are in Parliament have vowed to vote against the passing of the budget, while those not represented in Parliament have announced that they will mobilise the masses at grassroots level to fight against the implementation of the budget as announced by Minister Godongwana.
The Minister’s announcement of the budget was merely a proposal because it still has to be ratified by a majority in Parliament, so if the ANC doesn’t get the endorsement of the majority of votes in Parliament, then South Africa will be plunged into yet another Constitutional impasse which will obviously jeopardise the existence of the Government of National Unity.
The budget must be approved or passed on or before 30 May this year to avoid calamity.
Political parties in Parliament will vote on the budget matter on 2 April this year.
The Democratic Alliance has described Godongwana’s speech as ” the ANC’s tax and chaos budget.”
The DA’s statement sent to Tshwane Talks partly reads as follows:
“The ANC insisted on two likely permanent VAT increases, which cumulatively will increase VAT by 1% over the next 2 years.”
According to DA leader John Steenhuisen, the people of South Africa will consequently be poorer, and the future of the government will therefore be at risk.
“The ANC VAT budget doesn’t have a majority, and the DA won’t give it one, so it is up to the ANC to fix the mess that it has created,” said Steenhuisen.
“Our official position is that we will reject this budget because it will have an adverse effect on the poor,” said MK Party Tshwane leader Abel Tau.
“There have been numerous options which were put on the table regarding what the Minister Godongwana should have done to really have a budget that is pro-poor, and this is not one, and for that reason the MK Party is not going to support this budget,” vowed Tau.
AZAPO’s National Secretary for Publicity and Information Jabu Rakwena said the following:
“The budget speech has revealed what we have predicted, and we therefore decry the fact that the government still treats corporate entities as holy cows and refuses to tax them accordingly.”
Rakwena further said “the truth of the matter is that the country is broke and struggling to raise revenue in the face of increasing debt repayment because our debt repayment bill is R1 billion per day and that translates to R365 billion per annum.”
He said AZAPO reiterates its call for the abolition of provincial governance structures in favour of one central government supported by local government structures because this will save the country R200 billion a year.
“Hundreds of billions of rand are lost due to costs related to Black Economic Empowerment procurement system which compels government to pay more than the market value for goods and services,” said FF Plus’ Wouter Wessels.
“Government and the people are being exploited through the policy of inflated BEE procurement of services,” he said.
Wessels said Minister Godongwana is well aware of the fallout caused by the previous VAT hike, which showed that the public, and private companies in particular, are already overtaxed and consequently spend less due to tax hikes, resulting in tax evasion in some instances.
Copy of a budget speech: