ANC's VAT push 'may risk GNU'

AMENDED BUDGET: 'FINDING RIGHT FISCAL MIX A TEST'

- Brian Sokutu

The ANC's determination to push through the value-added tax (VAT) hike at all costs, despite opposition from government of national unity (GNU) political partners, could risk alienating GNU allies.

This could potentially lead to the collapse of the GNU, experts warned yesterday.

According to reports, the ANC has thrown down the gauntlet to its GNU partner, the DA, over the stalled budget, warning that it would approach the EFF for the required votes if the DA refused to accept a smaller VAT increase.

In a view shared by many economists, the DA wants Finance Minister Enoch Godongwana to introduce substantial cuts in government spending to focus on job creation programmes when tabling the much-awaited 12 March budget.

Godongwana has taken flak from some ANC members, labour, organs of civil society and GNU partners, for his initial plan to increase VAT by 2% – leading to the budget being postponed.

Cabinet has assigned Deputy President Paul Mashatile to convene a task team made up of ministers, to consider viable options – expected to report back by today.