South Africa’s National Treasury proposed a smaller VAT increase in a revised budget, reducing the hike to 0.5% to unify the coalition after earlier disagreements. Despite efforts, opposition from the Democratic Alliance remains a hurdle to parliamentary approval. President Ramaphosa’s office is optimistic about resolving outstanding issues.
South Africa’s National Treasury has proposed a reduced increase in the value-added tax (VAT) to foster unity within the ruling coalition. Previously, a 2-percentage-point increase was rejected by coalition partners, resulting in a significant budget impasse. The revised proposal suggests a 0.5-percentage-point increase starting May 1, bringing the VAT to 15.5%, with another similar raise planned for 2026.
Despite the modifications, political disagreements persist, primarily from the Democratic Alliance (DA). DA leader John Steenhuisen expressed his party’s refusal to support the budget in its current state, indicating ongoing challenges in securing parliamentary approval.
In an effort to progress the budget negotiations, President Cyril Ramaphosa’s spokesperson noted confidence that the remaining issues could be addressed satisfactorily to ensure the budget moves forward successfully.
The proposed VAT changes by South Africa’s National Treasury aim to reconcile differences within the ruling coalition amidst political disagreements. A smaller increase than initially suggested is intended to facilitate consensus, although key opposition remains from the Democratic Alliance. Overall, significant dialogue and compromise appear necessary for the budget’s passage in parliament.
Original Source: www.tradingview.com
