'Scrap SRD over VAT'

BUDGET 2025: GODONGWANA REVEALS HOW TO AVOID TAX INCREASES

- Molefe Seeletsa

Finance Minister Enoch Godongwana has stated that no tax increase will be necessary if the Covid social relief of distress (SRD) grant is canned ahead of Wednesday's budget speech.

Godongwana is set to present the 2025-26 national budget after a delay last month due to disagreements within Cabinet over a proposed two percentage point increase in value-added tax (VAT) to fill a shortfall of R60 billion.

The proposed VAT hike faced opposition from political parties within the government of national unity (GNU), who urged Godongwana and the National Treasury to explore other alternatives rather than raising VAT to 17%.

Discussions around a possible 0.5-point to 1-point increase, along with other proposals, continue, with no final decision yet.

There is speculation that the ANC may turn to the EFF for budget support if no agreement is reached within the GNU.