Still No Budget Compromise

VAT INCREASE: ANC, DA FAIL TO REACH AGREEMENT

- Molefe Seeletsa

Members of parliament remained divided late yesterday on whether to send the budget back to Finance Minister Enoch Godongwana and the National Treasury for the removal of the proposed value-added tax (VAT) hike.

The National Assembly's standing committee on finance and the National Council of Provinces' select committee on finance held a joint meeting to deliberate on the matter.

The discussions centred on the fiscal framework and revenue proposals, which set out economic policies, revenue projections, and government spending limits.

The meeting took place amid a deadlock between the ANC and the DA over the planned percentage point hike in VAT to 16%, spread over two financial years.

The first 0.5 percentage point hike is scheduled to take effect next month.

During the meeting, the uMkhonto weSizwe party's Brian Molefe labelled the fiscal framework and revenue proposals as "unrealistic".

Molefe suggested that the committee's report should accurately reflect the extent of public opposition to the VAT hike.