By Lehlohonolo Lehana
The 2025 budget announcement has been moved to 12 March after Cabinet failed to agree on a two percentage point value-added tax (VAT) hike included in the Budget.
The budget is likely to be redrafted if consensus is reached by then.
Finance minister Enoch Godongwana was expected to deliver the budget at 2pm. The move is unprecedented and has rocked the Government of National Unity (GNU).
There has not been agreement in terms of parties in the executive to actually find one another in proposals of the budget,” National Assembly speaker Thokozile Didiza said.
According to the statements delivered at the sitting, the main point of contention was around proposed tax hikes, which parties within the GNU did not agree on.
It was widely reported ahead of the scheduled speech that Value-Added Tax (VAT) was to be hiked by two percentage points, taking it from 15% to 17%.
This was corroborated by a leaked 2025 tax summary document for SARS, which showed the hike.
While adjustments to the zero-rated tax basket would have been made, parties—primarily the Democratic Alliance—took great exception to this.
President Cyril Ramaphosa called an emergency cabinet meeting ahead of the address to give Godongwana an opportunity to address the GNU parties on the proposals.
It’s the first time a budget speech has been postponed since at least the end of apartheid in 1994.
Following the 2024 national election, the ANC lost its majority, securing only 40% of the vote. This led to the creation of the GNU.
While the GNU has inspired positive sentiment thanks to its wider representation of South Africa’s interests, it has not been without conflict.
Godongwana said Cabinet had decided to postpone the release of the 2025 Budget to allow for further discussions, but said these discussions would not be broadened to other stakeholders, nor would it be feasible to conduct a wholesale expenditure review before March 12.
He also said there was no deadlock-breaking mechanism when it came to approving a Budget, which was a Cabinet document.
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Video Courtesy of Parliament.