How Godongwana struggled to get budget approved in parliament

Postponements were caused by plan to hike VAT

- By Mpho Sibanyoni

Finance minister Enoch Godongwana's February 19 budget was called off after political parties inside and outside the GNU got wind of the minister's plan to increase the VAT.

(Gallo Images)

Finance minister Enoch Godongwana got a shock of his life when he was forced to postpone the 2025 Budget Speech, not once but twice.

The postponements, a first in South Africa's history, were caused by sharp disagreements over proposed Value-Added Tax (VAT) increases.

The February 19 budget was called off after political parties inside and outside the government of national unity (GNU) got wind of Godongwana's plan to hike the VAT by two percentage points from 15% to 17%.

The proposed 2% VAT increase was projected to raise R58-billion.

Though he enjoyed support from his political party, the ANC, the plan was opposed by the DA, the second-largest political party in the GNU.

Major political parties outside the GNU that opposed the tax hike, which would have increased the price of goods and services, included the EFF, MK Party, and ActionSA.

This meant the ANC, which leads the GNU, did not have a majority vote to push through the main parts of the budget in the National Assembly.

This resulted in the budget speech being postponed to March.