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South Africa’s Finance Minister, Enoch Godongwana, has been forced to delay the national budget after sharp disagreements within the coalition government over a proposed value-added tax (VAT) increase.
Godongwana, a member of the ruling ANC, had planned to raise VAT from 15% to 17%, a move that would have pushed up prices at a time when many South Africans are struggling with the cost-of-living crisis. However, coalition partners, including the Democratic Alliance (DA) and Freedom Front Plus, opposed the plan, leading to an unprecedented budget postponement.
This marks the first time since the end of apartheid in 1994 that a South African finance minister has failed to table the budget on schedule, sending shockwaves through the country. The rand fell sharply against the US dollar as markets reacted negatively to the uncertainty.
DA leader John Steenhuisen said his party could not, in “good conscience,” support a VAT hike, arguing it would “break the back of the economy.” The Freedom Front Plus also criticized the process, saying they were only informed of the proposed increase shortly before the budget was due to be presented.
In response, Godongwana insisted that the VAT proposal had been discussed in the cabinet the previous week. He confirmed that the budget will now be tabled on 12 March following further negotiations.
The opposition Economic Freedom Fighters (EFF) condemned the delay, calling it a “symptom of weak, indecisive, and opportunistic governance.” Meanwhile, the DA hailed the postponement as a “victory” and vowed to push for a budget that prioritizes growth and job creation.
