South Africa’s 2025 budget faced delays due to disagreements over a proposed VAT hike. The cabinet met just before the finance minister’s speech, with the Democratic Alliance opposing the plans. A presidential spokesperson expressed confidence in resolving the issues, but an agreement had not been reached at the time of the presentation.
The 2025 South African budget presentation faced last-minute challenges as the cabinet continued discussions just before the finance minister was scheduled to present. The budget was delayed by disagreements among coalition parties regarding a proposed increase in value-added tax (VAT) by 2 percentage points, setting it at 17%. The Democratic Alliance (DA) opposed this hike, resulting in a stalemate unprecedented since the end of apartheid.
The Democratic Alliance, being the second-largest party in the coalition led by the African National Congress, needed to support the budget for it to pass. A spokesperson for President Cyril Ramaphosa expressed optimism that the outstanding issues could be resolved before the presentation, stating, “A careful balance has been struck and all the necessary compromises have been made on issues related to the budget.”
As the speech time approached, the DA had yet to agree to the updated budget. The situation reflects the complexities of coalition politics in South Africa, emphasizing the importance of compromise among parties for effective governance. The outcome of these discussions will determine how fiscal policies will evolve in the coming year.
In summary, South Africa’s 2025 budget presentation was fraught with last-minute negotiations primarily due to disagreements over a VAT increase. The coalition government’s ability to navigate these discussions is crucial for fiscal stability. The outcome highlights the challenges of coalition governance and the necessity for compromises among parties involved to pass the budget.
Original Source: www.marketscreener.com
