Sunday Times<\/a> reports that finance minister Enoch Godongwana has “responded positively” to a proposal to amend his fiscal framework with an additional R20 billion to R60 billion in revenue.<\/p>\n\n\n\nAccording to insiders at the National Treasury, the South African Revenue Service (Sars) estimates that its R7.5-billion funding boost will help it collect this extra revenue up to December 2025.<\/p>\n\n\n\n
Sars has already identified debtors, including companies and individuals, which it will target “immediately” to boost tax collection.<\/p>\n\n\n\n
National Treasury and Sars are expected to present the proposal to President Cyril Ramaphosa before a meeting of the Government of National Unity (GNU) on Wednesday, 23 April.<\/p>\n\n\n\n
Numerous companies \u2014 including Afrihost, Discovery, FNB, Rain, and Vodacom \u2014 have already notified their customers that the VAT hike will impact their product and service prices.<\/p>\n\n\n\n
Should the proposal proceed, the 15.5% VAT rate will only be in effect for two months, and rebates will be paid to companies and consumers to compensate for the 0.5 percentage point increase.<\/p>\n\n\n\n
The VAT increase has been at the core of the budget disagreement between the ANC and two of its key GNU partners.<\/p>\n\n\n\n
The largest GNU member \u2014 the ANC \u2014 failed to convince the DA and FF+ to vote in favour of the budget despite delaying its tabling for the first time since South Africa became a democracy.<\/p>\n\n\n\n
The ANC subsequently approached parties outside the GNU to secure sufficient support to pass the budget. <\/p>\n\n\n\n
Ultimately, 194 MPs voted in favour while 182 voted against the budget.<\/p>\n\n\n\n
The table below provides a breakdown of how each party voted. The bolded parties are in the GNU and the orders are based on member numbers.<\/p>\n\n\n\nIn favour<\/th> Against<\/th><\/tr><\/thead> African National Congress (ANC)United Democratic Movement<\/strong>Rise Mzansi<\/strong>GOOD PartyDemocratic Alliance (DA)Freedom Front Plus (FF+)Budget legal challenge<\/h2>\n\n\n\n Several of the parties that voted in favour of the budget, including ActionSA and BOSA, claimed only to have done so on condition that the VAT hike be scrapped.<\/p>\n\n\n\n
ANC and IFP members on the standing committee of finance supported ActionSA’s non-binding recommendation to scrap the VAT hike and freeze personal income tax bracket adjustments. <\/p>\n\n\n\n
The recommendation lacked details on how to avoid the VAT increase.<\/p>\n\n\n\n
Legal experts surmised that doing so was improbable, as the finance minister himself stated it was part of the budget.<\/p>\n\n\n\n
The ANC’s biggest GNU partner \u2014 the DA \u2014 and the EFF challenged Parliament’s passing of the budget in the Western Cape High Court.<\/p>\n\n\n\n
The DA argued that the finance committee’s report with ActionSA’s recommendation was unlawful and unconstitutional as it violated the Money Bills Amendment Procedure and Related Matters Act of 2009.<\/p>\n\n\n\n
Part of the argument is that it lacked a clear resolution to amend the fiscal framework to scrap the VAT hike. <\/p>\n\n\n\n
DA federal chair Helen Zille told the Sunday Times the party was continuing its legal action as it was not aware of any VAT hike reversal plan. <\/p>\n\n\n\n
“The ANC has not made any requests to us to drop the court challenge as far as I am aware,” Zille said.<\/p>\n\n\n\n
According to Standing Committee on Public Accounts chair Songezo Zibi, who is also the leader of Rize Mzansi, a majority of MPs would need to support the solution when Parliament reopens in early May.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sars has estimated it will collect an additional R20 billion to R60 billion in taxes up to December 2025, eliminating the need for a VAT hike. However, the reversal may only happen in a few months.<\/p>\n","protected":false},"author":341042,"featured_media":591949,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"idle","_sma_x_autopost_error":"","_sma_x_post_id":"","_sma_facebook_post_id":"","_sma_instagram_post_id":"","_sma_threads_post_id":"","_sma_x_attempts":0,"footnotes":""},"categories":[19,18668],"tags":[98858,70770,19252,18909,71346,30086,12285,59869,19101,99119],"class_list":["post-591941","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-government","tag-2025-budget-speech","tag-actionsa","tag-african-national-congress-anc","tag-democratic-alliance-da","tag-enoch-godongwana","tag-finance-minister","tag-national-treasury","tag-president-cyril-ramaphosa","tag-south-african-revenue-service-sars","tag-value-added-tax-vat-2"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/591941"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341042"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=591941"}],"version-history":[{"count":9,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/591941\/revisions"}],"predecessor-version":[{"id":591958,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/591941\/revisions\/591958"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/591949"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=591941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=591941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=591941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}