A new date has been set down for the presentation of Finance Minister Enoch Godongwana’s budget speech. The Government of National Unity’s first budget speech was meant to be tabled this afternoon. However, in an unprecedented turn of events, cabinet made the call to postpone it at the eleventh hour, as parties within the GNU could not reach a consensus about its contents.
It’s the first time in South Africa’s democratic history that this has happened, which sent markets into a panic. The rank sunk to R18.58/$ from a significantly stronger R18.33 earlier today.
While speaking during a media briefing, Godongwana said his new budget will now be presented to the public on 12 March 2025. He explained what led to this decision, and why a 2% increase in value added tax (VAT) is a contentious issue.
“You can’t have the two percent alone , without talking about what’s going to replace it and that does not become contentious. What we are grappling with is not necessarily the 2%. What we are grappling with; given the challenges and the priorities that we are facing, how do we fund that?”
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Several parties within the GNU opposed the move to hike VAT.
“Do we borrow more? What are the implications of that? Do we continue cutting expenditure? What are the implications of that? Do we raise tax? What are the implications there? There is general agreement that in the current environment we need to find a way of funding our priorities. The debate is what is the best way of doing it,” said Godongwana.
read more: Budget 2025 postponed as DA fights 2% VAT increase
