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DA Fights Back: ANC’s VAT Hike Will Push More South Africans Into Poverty
Parliament has approved the national budget framework in a tense vote, with 194 lawmakers in favor and 182 against. While the ruling African National Congress (ANC) secured backing from smaller parties, its main coalition partner, the Democratic Alliance (DA), firmly opposed the plan.
At the center of the dispute is a proposed VAT hike, which will raise the rate by one percent over two years, reaching 16% by 2026-27. The DA argues this move will burden struggling South Africans and has vowed to challenge it in court.
[BREAKING NEWS] Members of Parliament vote in favour of the 2025 budget. pic.twitter.com/QSvAFyR14y
— eNCA (@eNCA) April 2, 2025
Also Read: DA Loses VAT Fight as ActionSA and ANC Push for Budget Amendments
Coalition Tensions Rise
The ANC, forced into a coalition after losing its majority in the last election, had to negotiate extensively before finalizing the budget. Initially set for a February presentation, the plan was delayed due to disagreements. Finance Minister Enoch Godongwana later introduced a revised draft, which the DA rejected.
DA leader John Steenhuisen condemned the VAT hike, calling it “unthinkable” and accusing smaller parties of handing the ANC an easy win. The DA claims the process was unconstitutional, arguing that alternative proposals were dismissed without fair consideration.
The DA is taking the fight against the ANC’s VAT Budget to court. Watch as DA Leader, John Steenhuisen unpacks this.
The DA negotiated for changes that would have ensured economic growth and job-creation, but the ANC unlawfully proceeded with a flawed process in Parliament. pic.twitter.com/rUC7BWAy2a
— Democratic Alliance (@Our_DA) April 2, 2025
Economic Concerns
South Africa’s economy has been struggling, with just 0.6% growth last year and inflation at 4.4%. Failing infrastructure, severe power outages, and high unemployment—hovering at 32%—continue to weigh on economic progress.
Additionally, a major drought in 2024 hit the agricultural sector hard, further stalling GDP growth. Despite this, the International Monetary Fund (IMF) projects a modest recovery to 1.5% growth in 2025.
While the ANC defends the VAT increase as a necessary step for fiscal stability, the DA insists it will only deepen the financial strain on ordinary citizens. The battle over tax policy is far from over, with the opposition prepared to take legal action to block the increase.
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Sourced:Cape Town ETC
