The Democratic Alliance (DA) has firmly rejected the ANC’s proposed budget, citing concerns over permanent tax increases and a lack of economic reforms.
In light of new and persistent spending pressures in health, education, transport and security, government has decided to raise value-added tax (VAT) by 0.5 percentage points in each of the next two years, which will bring VAT to 16% in the 2026/27 financial year.
“These have to do with the government properly fulfilling its service delivery mandate. After careful consideration, the government has decided to fund these. Deferring the funding of these sectors further would compromise the government’s ability to meet its constitutional obligations to the people,” Minister of Finance Enoch Godongwana said on Wednesday.
The first 0.5 percentage point increase in the VAT rate will take effect on 1 May 2025 and the second 0.5 percentage point increase will take effect on 1 April 2026.
DA Leader John Steenhuisen stated, “The DA will not support this budget,” emphasizing the party’s opposition to measures that could further burden South Africans.
The DA had proposed temporary tax increases contingent on major reforms to grow the economy, create jobs, and reduce waste.
However, the ANC rejected these conditions, instead pushing for two likely permanent VAT hikes totaling 1% over the next two years.
Steenhuisen warned, “As a consequence, the people of South Africa will be poorer, and the future of the government is at risk.”
He criticised the ANC for failing to accept the outcome of the recent general election and its reluctance to share power.
“It is deeply unfortunate that the ANC is prepared to sacrifice the South African people and risk the economic future of the country rather than accept it no longer has majority support,” Steenhuisen said.
The DA leader reiterated that the ANC’s VAT-heavy budget lacks majority support and called on the ruling party to address the economic challenges it has created.
“The ANC VAT budget doesn’t have a majority, and the DA won’t give it one. It is now up to the ANC to fix the mess it has created,” he concluded.
