Cabinet set to hold special meeting following budget speech postponement

JOHANNESBURG - Cabinet is expected to hold a special meeting following the cancellation of Finance Minister Enoch Godongwana’s budget policy statement last week.

Eyewitness News understands the budget will be the only matter on the agenda as parties in the Government of National Unity (GNU) seek to find a way forward and address concerns around the proposed tax hike.

For the first time in the country’s democracy, the budget couldn’t be tabled, with GNU partners and some within the African National Congress (ANC) rejecting a suggested 2% point Value-Added Tax (VAT) increase.

ALSO READ: What a 2% VAT hike would mean for the average consumer in South Africa

National Treasury is set to table a new budget on 12 March.

Treasury now has the opportunity to go back to the drawing table, this time supposedly being forced to consider proposals from various sectors of society and the ANC’s GNU partners.

President Cyril Ramaphosa speaking at the sidelines of the G20 foreign ministers’ meeting, defended Godongwana.

“No minister of finance gets to a point where they will just willy nilly raise taxes without getting to a point where they may believe that they have no other alternatives,” Ramaphosa said.

The finance minister has to find additional revenue to fund frontline services which, include health, education and public transport.

Some have suggested he looks to borrowing or cutting more, in order to plug these holes.

And while the answer to this question will only be provided in March, the clear signal from both the Godongwana and the president is that tough times await.

ALSO READ: