South Africa’s parliament has passed the 2025 Budget despite strong opposition to a proposed VAT increase. The budget was approved with 194 votes in favor to 182 against. Finance Minister Enoch Godongwana outlined a phased VAT increase, essential for maintaining public services under fiscal pressure. Opposition from the Democratic Alliance was countered by support from smaller coalition partners.
On April 2, 2025, South Africa’s parliament approved the 2025 Budget presented by Finance Minister Enoch Godongwana, despite significant opposition regarding an increase in value-added tax (VAT). The budget passed by a narrow vote, with 194 lawmakers in favor and 182 against, and no members abstaining. This decision followed a delay from February, primarily due to internal disputes over the VAT increase proposal.
Minister Godongwana introduced a phased VAT increase of 0.5 percentage points for the fiscal years 2025/26 and 2026/27, ultimately raising the VAT to 16 percent by 2026/27. He emphasized the necessity of the tax hike to maintain essential public services amidst growing fiscal pressures in sectors such as health, education, transport, and security.
Political opposition to the VAT increase was robust, with the Democratic Alliance (DA) opposing the budget due to concerns over tax increases and government spending priorities. Despite this opposition, the African National Congress managed to garner support from smaller coalition partners to ensure the budget’s passage after extensive political discussions.
After weeks of contentious debate, the budget was secured with the coalition’s effort despite initial conditional support that the DA had mentioned, which was dependent on withdrawing the Expropriation Act. The decision underscores the complexities of South African politics in addressing fiscal challenges within the country.
In conclusion, South Africa’s parliament passed the 2025 Budget amidst significant opposition, particularly regarding the controversial increase in VAT. The government aims to secure necessary funding for public services despite the challenges posed by differing political opinions. The ruling coalition’s ability to unite smaller parties was crucial in the budget’s passage, reflecting the intricate dynamics of the political landscape.
Original Source: english.news.cn
