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SOUTH AFRICA: DA Dig In Ahead Of Cabinet Meeting, ANC Push For Reduced VAT Hike

SOUTH AFRICA
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Democratic Alliance (DA) Spokesperson on Finance Mark Burke called it a "shame that the ANC is willing to risk South Africa’s economic stability in a desperate attempt to force a tone-deaf 0.75% VAT increase down the throats of South Africans" and declared that his party "refuses to be held hostage or intimidated by the ANC’s blatant threat to approach the EFF to pass this VAT-based budget."

  • The Sunday Times reported that the African National Congress (ANC) is planning to "erect an EFF budget scarecrow" and threaten to approach the radical Economic Freedom Fighters for the votes needed to pass the 2025 National Budget, if the DA refuses to support a reduced 0.75pp VAT hike.
  • The tug-of-war between the ANC and its coalition partners continues ahead of today's special Cabinet meeting called to discuss a revised spending plan draft. The ANC's and DA's brinkmanship forced the government to postpone the budget, while the first revised draft was rejected by the Cabinet last week.
  • News24 circulated a source report noting that President Cyril Ramaphosa and Finance Minister Enoch Godongwana floated the idea of a "middle ground" approach last week, which would involve a 0.5-1.0pp increase in the VAT rate, compared with the original proposal of a 2pp increase.
  • Tensions within the Government of National Unity (GNU) resurfaced as Corne Mulder, the new leader of Freedom Front Plus (FF+), said that the party's Afrikaner constituency has become "very sceptical" of the pact and reiterated that the 2025 National Budget is "the first real test" for the coalition.
  • The GNU is headed for another showdown today, with the DA showing no intention to soften its firm opposition to any VAT increases, keeping uncertainty elevated ahead of the announcement of the outcome of the much awaited Cabinet meeting.
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Democratic Alliance (DA) Spokesperson on Finance Mark Burke called it a "shame that the ANC is willing to risk South Africa’s economic stability in a desperate attempt to force a tone-deaf 0.75% VAT increase down the throats of South Africans" and declared that his party "refuses to be held hostage or intimidated by the ANC’s blatant threat to approach the EFF to pass this VAT-based budget."

  • The Sunday Times reported that the African National Congress (ANC) is planning to "erect an EFF budget scarecrow" and threaten to approach the radical Economic Freedom Fighters for the votes needed to pass the 2025 National Budget, if the DA refuses to support a reduced 0.75pp VAT hike.
  • The tug-of-war between the ANC and its coalition partners continues ahead of today's special Cabinet meeting called to discuss a revised spending plan draft. The ANC's and DA's brinkmanship forced the government to postpone the budget, while the first revised draft was rejected by the Cabinet last week.
  • News24 circulated a source report noting that President Cyril Ramaphosa and Finance Minister Enoch Godongwana floated the idea of a "middle ground" approach last week, which would involve a 0.5-1.0pp increase in the VAT rate, compared with the original proposal of a 2pp increase.
  • Tensions within the Government of National Unity (GNU) resurfaced as Corne Mulder, the new leader of Freedom Front Plus (FF+), said that the party's Afrikaner constituency has become "very sceptical" of the pact and reiterated that the 2025 National Budget is "the first real test" for the coalition.
  • The GNU is headed for another showdown today, with the DA showing no intention to soften its firm opposition to any VAT increases, keeping uncertainty elevated ahead of the announcement of the outcome of the much awaited Cabinet meeting.