Godongwana given notice to table new bill to reverse 0.5% VAT increase
The notice published on Thursday, in the government’s official communication channel for announcing new legislation and regulations, follows Wednesday night’s National Treasury statement to this effect.
Finance Minister Enoch Godongwana tabled the 2025 budget in the National Assembly in Cape Town on 12 March 2025. Picture: GCIS
CAPE TOWN - Finance Minister Enoch Godongwana has given notice in the government gazette of his intention to table a new bill to reverse the 0.5% VAT increase he announced last month.
The notice published on Thursday, in the government’s official communication channel for announcing new legislation and regulations, follows Wednesday night’s National Treasury statement to this effect.
However, political parties in Parliament say this move leaves the country in another budget limbo, with the minister having also indicated he plans to withdraw the two main money bills, which allocate money to all departments and spheres of government.
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It was the adoption of the fiscal framework - the precursor to the budget bills - that caused the latest friction within the Government of National Unity (GNU), with the Democratic Alliance (DA) and Freedom Front (FF) Plus voting against it.
With the finance minister intending to introduce new money bills in the coming weeks, opposition parties in Parliament say they expect the budget process to start from scratch, with a new fiscal framework.
The MK Party’s Visvin Reddy said, "If that framework is now outdated, or incorrect due to changes in revenue collection or VAT policy, then that too has to be withdrawn."
The Economic Freedom Fighters’ spokesperson, Sinawo Thambo, says if the minister withdraws the division of revenue and appropriation bills, it effectively nullifies the budget.
"The question that arises is which fiscal framework will inform the newly re-introduced division of revenue bill and appropriation bill? Because they will no longer be in sync in terms of the Money Bills Act."
The party wants National Assembly Speaker Thoko Didiza to publish all correspondence she receives from Godongwana on this matter.
The draft rates and monetary amounts and amendment of revenue laws bill the minister plans to table will not only restore the VAT rate to 15%, but also regulate other taxes such as transfer duties, income tax, import duties and carbon tax.
Godongwana is currently in Washington DC where he’s attending the spring meetings of the World Bank and International Monetary Fund, as well as hosting the second meeting of the G20’s finance ministers and central bank governors.