ANC Considering Abandoning VAT Increase Ahead of 6 May Deadline, Party Failing To Attract Support

• The African National Congress (ANC) met with the Democratic Alliance (DA) to discuss the way forward regarding the budget
• A senior ANC member admitted that they may have to abandon the Value-Added Tax (VAT) hike as the party failed to earn the support for it
• The National Assembly will meet again on 6 May 2025 for the budget to be officially approved if the ANC appeases its alliance partners

Briefly News journalist Byron Pillay has spent a decade reporting on the South African political landscape, crime and social issues. He spent 10 years working for a community newspaper before transitioning to online.

GAUTENG—The African National Congress (ANC) will have much to think about regarding the 2025 budget following a meeting with the Democratic Alliance (DA) on Saturday, 12 April 2025.

The two largest parties in the Government of National Unity met to discuss the budget, which is not set in stone despite being adopted in the National Assembly on 2 April.

Read also

EFF files papers to challenge implementation of budget vote, SA weighs in

The ANC received the support from ActionSA that it needed to pass the budget, on condition that it find an alternative to the Value-Added Tax (VAT) hike within 30 days.

The budget saga has been stretching on from 19 February, when the speech was initially postponed after the parties within the GNU failed to agree on the contents.

Finance Minister Enoch Godongwana then presented the budget on 12 March, but it drew criticism from many over the proposed 1% VAT increase over the next two years.

ANC member admits party may have to drop VAT push

Following the meeting in Sandton, Johannesburg, which was described as constructive, a senior ANC member admitted that the party may have to abandon its bid to push through the VAT increase.

Speaking to IOL, the member who was part of the meetings admitted that they failed to convince the other parties to support the VAT hike.

Read also

ANC hits reset button on Government of National Unity, will engage will all parties in next 5 days

“If we are going to keep the GNU going and not aliente other organisations, I think it's time we listen. We can't go at it on our own. It's time we realise that we are in the GNU with other parties that also have opinions,” the member said.

The party will now discuss the way forward in a National Executive Committee (NEC) meeting as the deadline for ActionSA’s ultimatum draws closer.

If the ANC goes ahead with scrapping the proposed VAT hike, the finance minister would need to find means to generate the R13,5 billion it would have brought in before the next National Assembly sitting on 6 May.

What you need to know about the budget speech saga

• Julius Malema stated that the government collapsed after failing to present a budget on 19 February.
• The uMkhonto weSiwe (MK) Party threatened a national shutdown if a VAT hike was included in the budget.
• The 2025 Budget was adopted in the National Assembly on 2 April after 194 members voted in favour of it.
• The Economic Freedom Fighters (EFF) filed papers in court to challenge the legality of the budget adopted by Parliament.
• The ANC Youth League wants DA ministers to be removed from their posts for voting against the budget.
• The ANC and DA sat down to discuss the future of the GNU following the divisions caused by the 2025 Budget Speech.

Read also

ANC has not made a decision about the Government of National Unity

ActionSA to hold the ANC accountable

Briefly News reported on 3 April that ActionSA promised it would hold the ANC accountable when it comes to the budget.

Herman Mashaba’s party agreed to support the budget on condition that the ANC scraps the VAT hike within 30 days.

ActionSA confirmed it would withdraw its support if the ANC did not keep its end of the bargain regarding the VAT.

Source: Briefly News