ANC Could Approach EFF for Votes for VAT Increase if DA Refuses

• The African National Congress has threatened the Democratic Alliance to get the Economic Freedom Fighters to side with them for a VAT increase
• The Government of National Unity parties are expected to meet to discuss a lower VAT increase than the initially proposed hike
• The DA refuses to budge on its stance against a VAT increase, while an insider warned of the impact of a zero-VAT increase on government programmes

With over seven years at Daily Sun and Vutivi Business News, Tebogo Mokwena, a Briefly News current affairs journalist, offered insights into South African politics, national, provincial and local governance, the Government of National Unity, political parties and Parliament.

JOHANNESBURG — While the Democratic Alliance (DA) is steadfast in its refusal to accept a VAT increase Finance Minister Enoch Godongwana planned to table during the now-postponed Budget Speech, the African National Congress (ANC) has an ace up its sleeve. It plans to rope the Economic Freedom Fighters (EFF) in to vote with it if the DA will not.

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What is the ANC planning?

According to the Sunday Times, the Treasury suggested that VAT be increased by 0.75% points. A meeting to discuss the proposed hike will occur on 3 March 2025 to discuss the advantages and disadvantages of the VAT hike. An inider alleged that President Cyril Ramaphosa may opt to rope the EFF in to support a VAT increase. The EFF has noted in the past that it is willing to join the Government of National Unity if the DA leaves.

What did the DA say in response?

The DA's leader john Steenhuisen said that the EFF would have to explain to its voters why they would vote for a VAT increase that could negatively impact the poor. The party proposed alternatives to the VAT increase. These include cutting the government's advertising budgets by 50%, reducing the budget on cabinet members' travelling costs and a fuel levy increase, among others.

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Impact of zero VAT increase

Godongwana reportedly informed the cabinet that introducing a zero-VAT increase could hit other government programmes. Treasury had budgeted, for example, an additional R35.2 billion for the COVID-19 Social Relief Distress Grant and R23.3 billion for old-age, pension and other social grants.

What you need to know about the VAT increase

• The Minister in the Presidency Khumbudzo Ntshavheni said the ANC rejected the VAT hike before the DA did
• Political analyst Moeletsi Mbeki said the proposed VAT increase showed that the ANC is no longer pro-poor
• The cabinet rejected Godongwana's second proposed budget speech, and the DA tabled alternatives to the hike

What did South Africans say?

Netizens commenting on TimesLIVE's X account weighed in, and some predicted that the EFF would not easily support the ANC.

Gcobani Ndzongana said:

"The EFF muast not allow the ANC to exploit it as a last resort. However, the ANC is simultaneously refusing to collaborate with the EFF on progressive policies. The EFF is not your side chick."

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EL said:

"The EFF clearly said they won't support that. So why is the ANC still on the VAT increase path?"

African Elixir asked:

"And they thing that the EFF will support taxing the poor?"

Cassiday Rangata-Jacobs said:

"I don't like the EFF but I think it's unfair to throw them under the bus like this."

Ngwato THobejane said:

"But the EFF indicated tat it prefers corporate and wealth tax hikes."

Cyril Ramaphosa speaks about postponed budget speech

In a related article, Briefly News reported that President Cyril Ramaphosa broke his silence after Godongwana announced that the budget speech would be postponed. Ramaphosa said the postponement was in the country's best interests.

The president noted that the GNU is working to ensure that the budget works for individuals and investors. He added that the budget speech would drive economic growth and shield the vulnerable.

Source: Briefly News