South Africa’s finance minister unveiled a revised budget proposing a smaller VAT increase. However, the proposal faced immediate rejection from the Democratic Alliance party. Concerns over high unemployment and economic inequality underscore the challenges the government faces in executing its fiscal plans.
On Wednesday, South African Finance Minister Enoch Godongwana presented a revised budget that included a smaller increase in value-added tax (VAT) than previously proposed. The updated plan raised VAT by one percentage point to 16 percent by the 2026/27 financial year, implemented in two increments: a 0.5-point rise in 2025/26 and another half-point subsequently. However, the announcement was met with boos from several parliamentarians, particularly the opposition party, the Democratic Alliance (DA), which promptly rejected the budget.
In summary, the revised budget presented by Finance Minister Enoch Godongwana aims to address pressing service needs through increased VAT but has faced immediate rejection by key political entities. The proposed tax adjustments and essential spending plans reflect the government’s struggle to navigate a sluggish economy, high unemployment, and significant inequality. The DA’s opposition signals a challenging road ahead for the budget’s approval and the government’s stability.
Original Source: www.france24.com
