VAT Hike Proposal Stalls Budget Approval Amid ANC and DA Disagreements

The ANC has identified the proposed VAT increase as the primary issue causing tension in ongoing budget negotiations.

The finance minister’s budget proposal includes a one-percentage-point VAT hike over two years, but the Democratic Alliance (DA), the ANC’s largest partner in the Government of National Unity (GNU), has firmly opposed the increase unless accompanied by economic reforms. ActionSA has also voiced its opposition to the proposal.

#ANC Mbalula: We continue to engage on passing of the #Budget2025 , negotiations continued until the early hours of the morning. We need this budget to pass. #sabcnews pic.twitter.com/8ZhWuVTe2N

— #LordOfTheMedia (@samkelemaseko) April 1, 2025

Fikile Mbalula, the ANC Secretary-General, highlighted the importance of continuing discussions with all parliamentary parties to secure approval for the budget and ensure the effective functioning of the power-sharing government.

“We acknowledge that the conditions under which we are operating have changed. We are now working under the framework of a Government of National Unity, and disagreements on the VAT issue have emerged within and outside the GNU. Passing the budget is essential for us to move forward with governing, stabilising the economy, and pursuing economic growth,” Mbalula stated during a media briefing on Tuesday.

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Sourced:African Insider