The Democratic Alliance (DA) has taken a firm stance against the revised 2025 budget proposed by Finance Minister Enoch Godongwana, particularly in regards to tax hikes. Party leader John Steenhuisen made it clear that the DA would not support any increases in taxes unless they were temporary and accompanied by significant economic reforms aimed at growing the economy, creating jobs, reducing wastage, and ultimately lowering taxes within a three-year timeframe.
Steenhuisen emphasized that the ANC needed to agree to these terms if they wanted the support of their biggest coalition partner in passing the budget through parliament. However, the ANC has refused to accept these conditions, opting instead for what the DA considers to be permanent tax increases, including a 0.5 percentage point hike in VAT for the upcoming financial year and a similar increase in the following year, ultimately bringing VAT to 16% by 2026.
The DA leader expressed concerns that the ANC’s unwillingness to collaborate on these key issues could jeopardize the future of the coalition government formed after the 2025 elections. He criticized the ANC for prioritizing their own interests over the welfare of the South African people and the country’s economic future.
Despite the ongoing deadlock between the two parties, Steenhuisen stressed that the DA remained open to negotiations and compromise in order to reach a consensus that would prioritize economic growth and job creation. He urged the ANC to address the impasse and work towards a budget that aligns with the principles of growth and prosperity for all South Africans.
In response to the DA’s resistance to tax increases, Minister Godongwana suggested that the party’s motivations were rooted in previous coalition battles and grievances rather than the specific VAT hike. He anticipated continued disagreements and debates in parliament’s finance committees in the coming weeks.
The Minister, who had to backtrack on a previous budget proposal that included a VAT increase after the DA’s opposition, expressed his determination to proceed with the new budget despite the challenges. The standoff between the parties reflects the complexities of coalition politics and the need for constructive dialogue to address the country’s economic challenges effectively.
