Enoch Godongwana Delivers 2025 Budget Speech, VAT Rate Remains at 15% but Fuel Levy to Increase

• Finance Minister Enoch Godongwana announced that the Value-Added tax rate would remain at 15%
• Godongwana added that the zero-rated food basket, designed to assist the poor in the country, would fall away
• In an attempt to boost revenue, the general fuel levy will increase by 16 cents per litre for petrol, and by 15 cents per litre for diesel

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.

WESTERN CAPE – Finance Minister Enoch Godongwana has delivered the 2025 Budget Speech, the third time he’s attempted to do so.

Godongwana delivered the speech to Parliament on 21 May 2025, and to the relief of many, the Value-Added Tax (VAT) rate remains the same.

The VAT rate will remain at 15%, after numerous objections from the public and political parties to previous attempts to increase it.

Godongwana announces VAT to remain the same

During his speech, Godongwana noted that the VAT would remain the same, stating the previous proposed hike caused a vital debate, but one that also created some uncertainty.

He added that the country now had certainty thanks to the VAT rate remaining the same.

“This decision reflects our commitment to listen to South Africans, and to all the political parties represented in this House,” he said.

He added that the past two months provided valuable lessons, which were considered, and will inform how the budget process is conducted going forward.

The downside of no VAT increase

With no VAT on the table without an alternative source of revenue, Godongwana stated that this significantly reduced the ability to fund additional government programmes and projects.

The minister also noted that they would find other ways to make up for the shortfall. The zero-rated food basket, which would have benefited poorer households, has now fallen away. South Africans can also expect an increase in the fuel levy.

“To this end, this budget proposes an inflation-linked increase to the general fuel levy. It means from the fourth of June this year, the general fuel levy will increase by 16 cents per litre for petrol, and by 15 cents per litre for diesel,” Godongwana added.

The minister added that these measures alone would not close the fiscal gap. He continued that the 2026 budget would need to propose new tax measures, aimed at raising R20 billion.

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.

Malema is not confident in budget speech

Briefly News previously reported that the Economic Freedom Fighters' Julius Malema said he didn't have confidence in the budget speech.

Malema commented on 20 May 2025, ahead of the Finance Minister's upcoming budget speech.

The Red Berets' leaders said that he does not believe that the speech would adequately address the unemployment crisis in the country.

Source: Briefly News