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HOW BUDGET 2025 UNFOLDED

Government planned to spend VAT on civil servant pay hikes, Grade R

In an unprecedented move, Finance Minister Enoch Godongwana's Budget Speech has been delayed. Follow the blog here for updates.
Budget-Godongwana Minister of finance Enoch Godongwana after the budget speech has been “delayed indefinitely”, an unprecedented move in post-Apartheid SA. The decision came after the government of national unity partners failed to agree on hiking the VAT rate from 15% to 17% as the budget proposed, and cabinet failed to sign it off on Wednesday.The new proposed date is the 12th of March (Photo: Phando Jikelo/ Parliament of SA)

Comments

William Kelly Feb 19, 2025, 03:04 PM

It is an absolute disgrace that they leave things to after the last minute. Their competency is in question (as if it wasn't before). If this is how they run the goddam budget how much worse is everything else that we're not seeing?

Grumpy Old Man Feb 19, 2025, 03:07 PM

I can't help feeling that one of the reasons for proposing an increase in tax is because of a failure/ refusal to deal with our public sector wage problem! This is not the fault of our Finance Minister - but it is that of the party to which he belongs! We have to confront this

Richard Bryant Feb 20, 2025, 10:14 AM

They agreed to a 5.5% increase while CPI is 3% and economic growth barely 1%. The problem is the public service wages are now set at this new base and will only go up from here. So the VAT increase will be here to stay.

Feb 19, 2025, 03:15 PM

Actually see this as positive - creates opportunities for ventilation and checks and balances BEFOREHAND.

Nick Miller Feb 19, 2025, 07:48 PM

Agreed but it is unbelievable that they do not discuss with their GNU partners and reach a consensus.

John Kannemeyer Feb 19, 2025, 03:15 PM

This implies that all the GNU members were not advised up front as to what was in the budget. The ANC need to remember they are a coalition Government to all intents and purposes.

Johan Buys Feb 19, 2025, 04:04 PM

The DA is opposed to the VAT increase? Would they prefer that R60b gets raised from extra personal income tax hikes?

G H Feb 19, 2025, 04:27 PM

"Following our defeats of the ANC’s plan to hike VAT, we will now fight with the same vigour to introduce a new budget that is anchored in growing the economy, rather than increasing taxes or debt." I think that's pretty clear

Johan Buys Feb 19, 2025, 04:57 PM

The VAT increase delivers cash in month 1. Fairy tales about growth are fairy tales. There is ZERO exclusionary connection in any event. Why can’t one do both??

G H Feb 19, 2025, 05:43 PM

Johan, your question was regarding the DA's preference. I thought Steenhuisen's words gave a clear answer.

Nick Miller Feb 19, 2025, 07:42 PM

I agree. In addition, an increase in VAT broadens the tax base . The electorate must understand that every thing needs to be paid for. That said, if you got rid of corruption, it is likely that VAT can be reduced to 10%!

D'Esprit Dan Feb 20, 2025, 07:02 AM

It's just another unsustainable tax that doesn't address the root of the issue - we need growth, we need to stop blowing billions on corrupt cadre-compromised SOEs and we need policies that encourage both domestic and foreign investment. VAT increase is plugging the dyke with a sticking plaster.

Fernando Moreira Feb 19, 2025, 04:25 PM

Well done DA Imagine the masses realizing that hey should have voted for the DA !! Time for business to step up and back the DA and like minded parties on the running of the economy Vote DA its simple

D'Esprit Dan Feb 19, 2025, 04:33 PM

R700bn in SOE bailouts since 2013, R365bn a year lost in exports because of SOE logistics failures, loadshedding losses (SOE failure) to GDP of R225bn from 2020 to 2023, and yet the ANC wants to raise taxes instead of cutting them loose and getting private investment? Criminal at every level!

Johan Buys Feb 19, 2025, 04:53 PM

If a cabinet minister did actually leak confidential data (unrelated to a crime), then he/she MUST be fired immediately. The GNU cannot operate like a treehouse committee.

Graeme Feb 19, 2025, 05:24 PM

All they have to do is get rid of the corruption in government and the SOEs. Then we would be cash-flush. But that isn't in the cadre's interests, even if it is in the interests of the voters and population.

Alan Watkins Feb 19, 2025, 05:54 PM

"Godongwana accuses Cabinet Minister of leaking VAT hike proposal to media" This implies this was an ANC budget, only relaeaed to GNU partners at the last minute. No ANC no! All GNU partners should have been included and their requirements included, to some extent

Karl Sittlinger Feb 19, 2025, 06:46 PM

Well done DA. Don't listen to DM that is already trying to spin this as pure brinkmanship. It was time to push back against the ANC who have negotiated in bad faith from the get go. Thank you!

Feb 19, 2025, 06:59 PM

@fernando morera…the masses, those who actually do who vote, do so on the basis of optics, kinship, and promised subsidies, not merit. That’s why Midvaal and Umgeni remain islands. No use bewailing this. DA etc have to learn how to deal with this REALITY and stop handwringing…

keith.ciorovich Feb 19, 2025, 07:14 PM

The Anc has bankrupted the country and destroyed the economy. The country cannot continue to increase taxes to meet expenditure. Maybe, if corruption was meaningfully tackled the country would not be reduced to junk status. The presidents only concern is his party's interests.

Sheila Vrahimis Feb 19, 2025, 09:14 PM

i hope that this is a great embarrassment for the anc but then they are so thick skinned. once again they acted unilaterally let's hope this serves as a lesson. increasing salaries for already overpaid government employees, unbelievable! but then they fear cosatu and strikes.

Jane Crankshaw Feb 20, 2025, 06:36 AM

Claim the R60b shortfall from the Guptas - they're the ones that led us into this mess! Together with Zuma, they are the architects of our Fiscal Destruction! Stop robbing the taxpayer & go after the real criminals & end BEE policies to encourage investment & new taxpayers into our Economy.