By Lehlohonolo Lehana.
The National Assembly (NA) voted in favour of the budget tabled by Finance Minister Enoch Godongwana by 194-182 votes, with no abstentions.
The budget has been the sternest test of the broad coalition government formed last year after the African National Congress (ANC) lost its parliamentary majority for the first time since apartheid ended in 1994.
The budget was meant to be presented in February but was postponed at the last minute, before a revised version was presented last month. Its most contentious elements include proposals to raise value-added tax and not adjust personal income tax brackets for inflation.
The Democratic Alliance (DA), Economic Freedom Fighters (EFF) and Umkhonto weSizwe said the process that led to the adoption of the report on Tuesday was flawed.
DA had written to the speaker of the National Assembly, Thoko Didiza, with an urgent request for a postponement of Wednesday’s sitting of the National Assembly, (NA) because of “irregularities” in the adoption of the report on the fiscal framework by the finance committee on Tuesday.
The EFF has also sent a letter expressing similar sentiments and warned of possible legal action if the National Assembly adopts the report.
Parliament has confirmed that it has received a letter from the EFF to ask for the removal of consideration of the adopted fiscal framework report.
The party, through its chief whip, Nontando Nolutshungu, wrote to Didiza on Tuesday evening to request “urgent remedial actions” following the finance standing committee’s adoption of the report.
The report adopted on 1 April 2025 be withdrawn from the Announcements, Tablings and Committee Reports;
The report be removed from the Order Paper of the National Assembly scheduled for 2 April 2025, as published in No. 13-2025; and
The Standing Committee on Finance be instructed to reconvene and formally resolve – before adopting any report – whether it accepts or amends the 2025 Fiscal Framework and Revenue Proposals, in accordance with Section 8(4) of the Act.
During the debate, DA finance spokesperson Mark Burke argued that a recommendation by parliament’s finance committee that Finance Minister Enoch Godongwana use the next 30 days to find an alternative to a staggered VAT increase due to take effect from 1 May, was not worth the paper it was written on.
“Now, sure, supporters of this April Fool’s Day farce are very quick to point out that this report makes recommendations to relook at the tax increases. Madam speaker, the archives are full of reports with ignored recommendations,” he said.
“Reports in the hands of an ANC-led government mean nothing. Madam speaker, we squandered an opportunity to protect South Africans from VAT yesterday.”
Burke said the report adopted by the committee would preserve the fiscal framework as is, casting the tax hikes in stone and perpetuating poor fiscal and economic policy-making.
Tax experts agree with Burke’s assessment that the Money Bill Amendment Act, which sets out how the fiscal framework is processed, allowed only two options — MPs could either accept or amend it.
The route taken by the committee leaves the legislature in uncharted waters, both in law and in fact, because it is not clear how an amendment to the tax framework could be adopted in less than 30 days.
Godongwana said there was room to do so but reminded those who called the tax proposals he tabled on 12 March anti-poor that the revenue they were meant to raise was intended precisely to fund services for the poor.
“The debate is focused on one side of the equation, and that equation is on the revenue side,” he said.
Godongwana said the tabling of the Rates and Monetary Amounts and Amendment Bills, which give effect to the tax proposals, on Friday allowed an opportunity for “all of us to have this engagement about 0.5 percent and all of that”.
“We would be more than happy to work with all people in this room with constructive proposals, but those constructive proposals must talk to two equations of this budget.”
On Tuesday, a joint sitting of parliament’s standing and sitting committees on finance to draft a report on Godongwana’s fiscal and revenue proposals deadlocked between the ANC’s call to endorse it and the DA’s insistence that it be amended.
A proposal by ActionSA, which is not a member of the ruling 10-party coalition, allowed the committee to fudge a way out of the impasse.
EFF MP Omphile Maotwe accused the ANC of using its coalition partners, and ActionSA, to sell the poor down the river rather than prevail on Godongwana to consider alternatives, including a wealth tax.
She warned that persisting with his VAT increase will “ultimately collapse the confused GNU government”.
ActionSA’s Athol Trollip countered that the party was convinced the recommendations could avert tax increases.
“We remain unwavering in our commitment shielding ordinary South Africans from unjust and unnecessary tax hikes,” he said.
“Our approach allows for the necessary time to table alternative revenue proposals and most importantly to prevent a postponement of the VAT increase without triggering a full budget revision.”
DA leader John Steenhuisen said the party was preparing to file papers in the Western Cape high court, on the basis that the tax proposals were unconstitutional and that the committee’s processing of the fiscal framework was flawed “in that the fiscal framework was not put to the committee to approve or reject”.