Ramaphosa says Cabinet meeting where decision to postpone Budget Speech was taken was mature & collegial

CAPE TOWN - President Cyril Ramaphosa said that Wednesday's Cabinet meeting at which a decision was taken to postpone the tabling of the national budget was both mature and collegial.

A proposed two percentage point increase in the value-added (VAT) tax rate was the conundrum which did not sit well with the majority of Government of National Unity (GNU) parties.

While opposition parties have criticised the GNU for the last-minute attempt to reach consensus, Ramaphosa said he would ensure that his Cabinet eventually delivers a budget that works for all.

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In a speech he was due to deliver on Wednesday, Finance Minister Enoch Godongwana would have explained the proposed VAT hike as necessary to allow for spending in education, health and rail services.

As a trade-off, he would have proposed increasing the list of tax-free goods, keeping the fuel and Road Accident Fund levies as is and offering above inflation social grants increases.

Ramaphosa said that over the next three weeks, his Cabinet would continue to deliberate on budget outcomes that would protect vulnerable citizens and lay a platform for economic growth.

Presidency spokesperson, Vincent Magwenya: "The Government of National Unity, will in the coming days and weeks, intensify efforts that balance the imperatives that drive the fundamental growth objectives of this administration with the realities of a constrained fiscal environment."

Opposition parties have also rejected the reported proposal to hike VAT to 17%.

Godongwana has suggested it would be the lesser of the taxation evils rather than increasing personal income or corporate taxes.