The South African Parliament has passed the 2025 Budget, which includes a contentious VAT increase. It was approved by a narrow margin, with 194 votes for and 182 against. Finance Minister Enoch Godongwana defended the tax hike, while facing opposition from the Democratic Alliance. The budget was delayed but ultimately secured support from coalition partners.
The South African Parliament has approved the 2025 Budget, presented by Finance Minister Enoch Godongwana, despite considerable opposition regarding a proposed increase in value-added tax (VAT). The budget was passed with a narrow margin of 194 votes in favor and 182 against, with no abstentions recorded during the voting process.
Originally scheduled for February, the budget faced delays due to disputes surrounding the VAT increase. On March 12, Minister Godongwana detailed a phased increase, including a 0.5 percentage point rise in both the 2025/26 and 2026/27 years, aiming to reach a VAT rate of 16 percent by the end of the latter financial year.
In his address, Minister Godongwana justified the tax hike, highlighting its necessity for maintaining public services amidst increasing fiscal pressures, particularly in sectors such as health, education, transportation, and security. However, this increase prompted strong political dissent, particularly from the Democratic Alliance (DA), the second-largest party in the ruling coalition, which opposed the budget due to concerns over taxation and government spending.
Despite the DA’s initial contention and calls for conditions related to support, the ruling African National Congress (ANC) was able to garner enough support from smaller coalition partners to secure the budget’s passage. The legislative process included extensive political discussions and debates leading up to the final vote.
In summary, the South African Parliament’s approval of the 2025 Budget marks a significant legislative action amid contentious debates about VAT increases. Finance Minister Enoch Godongwana emphasized the importance of the tax hike for sustaining essential public services. The budget faced resistance predominantly from the DA, but ultimately succeeded due to the ANC’s ability to align with smaller parties. This development highlights the complexities of fiscal policy-making in times of economic strain.
Original Source: english.news.cn
