Economic landscape shifts with Finance Minister's third budget plan

Minister expected to host a media briefing to explain Budget 2025 technical process

- YOGASHEN PILLAY

FINANCE Minister Enoch Godongwana could be preparing for an unprecedented third budget speech after the reversal of a 0.5 percentage points increase in value-added tax (VAT) last week.

This comes as Godongwana on Wednesday will host a media briefing to explain the technical process that must now be undertaken regarding the 2025 Budget.

This decision follows a court challenge brought forward by the Democratic Alliance and the Economic Freedom Fighters regarding the proposed VAT hike in the 2025 Budget.

The Western Cape High Court ratified an agreement reached out of court on April 27, allowing Godongwana to rescind the increase, which was initially set to take effect on May 1.

Waldo Krugell, an economics professor at the North-West University, said that the Treasury now has to prepare a third budget, the date of which is still to be announced. "In practical terms, we have the Medium Term Budget Policy Statement (MTBPS), so there is no danger of a government shutdown. Though politicians are shouting, they will not play a big role in getting to new numbers," Krugell said.