Enoch Godongwana To Present New Budget on 21 May, Changes Expected After VAT Increase Is Scrapped

• Enoch Godongwana is expected to present a new budget to the National Assembly on 21 May
• The Finance Minister has to draft a new budget after the Western Cape High Court set aside the last one
• With the Value-Added Tax hike scrapped, the minister will have to cover a R75-billion revenue shortfall

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

GAUTENG – Will it be a case of third time lucky for Enoch Godongwana on 21 May?

The Finance Minister is expected to present a new budget to the National Assembly on 21 May, the third time he will attempt to finalise the country’s fiscal framework.

The saga surrounding the budget dates back to 19 February when the speech was cancelled at the eleventh hour after not all parties within the Government of National Unity (GNU) agreed on the proposed 2% Value-Added Tax (VAT) hike.

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The saga surrounding the 2025 Budget Speech

The events of 19 February were just the start of what would become a long-running saga involving the budget.

The speech was postponed until 12 March, when Godongwana again attempted to get it over the line. The 2% VAT hike was scrapped in favour of a 1% increase over two years, but this also drew criticism from some. The minister then had 30 days to get the budget adopted by the National Assembly, however, this appeared to be a tough ask as the Democratic Alliance (DA), Economic Freedom Fighters (EFF) and the uMkhonto weSizwe (MK) Party all objected to any form of a VAT increase.

With time running out, the African National Congress struck a deal with ActionSA and smaller parties, allowing them to have the budget adopted in the National Assembly, on condition that they find an alternative to the VAT increase within 30 days.

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That bought the minister more time, but with no alternatives in sight, he opted to scrap the VAT hike.

High Court throws spanner in the works

With the minister reversing the proposed VAT hike, he was tasked with covering up the R75-billion revenue shortfall left behind by the absence of the VAT. Godongwana was then given another headache when the Western Cape High Court set aside Parliament’s adoption of the fiscal framework.

The court got involved following an application made by the DA and EFF who both objected to the adoption of the budget.

With the entire fiscal framework being deemed null and void, the minister will have to go back to the drawing board and put together a new budget.

Could the budget change much?

While the main source of contention for opposition parties was the VAT, the new budget is expected to contain other changes as well. With the minister needing to make up for the shortfall, a reallocation of funds could be a solution.

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Godongwana is expected to submit options to Parliament in the coming days about which parts of the budget could be sacrificed. Scrapping the Social Relief of Distress grant was previously considered, as it amounted to R102-billion over three years.

Many South Africans have suggested that the size of the cabinet be trimmed instead, and that the perks for ministers be reduced.

What you need to know about Godongwana and the budget

• Godongwana claimed that no finance minister was happy to increase taxes, during his 12 March speech.
• Cabinet rejected the finance minister's revised budget, one without any tax hikes included in it.
• Godongwana hit back at the DA, saying that the party never submitted proposals as it previously claimed.
• The National Assembly voted in favour of Godongwana's budget, with the 0.5% VAT included.
• Godongwana told the EFF and DA that it was too late for him to reverse the VAT hike after they went to court.

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Godongwana has no intention of resigning

Briefly News reported that Godongwana had no intention of resigning, despite the growing criticism levelled against him.

The Minister of Finance has been criticised for his handling of the 2025 budget by opposition parties.

The African National Congress stated that it had no plans to remove Gondongwana from his post either.

Source: Briefly News