Parliament will hold public hearings on the proposed budget on Tuesday, 25 March, with trade union federation COSATU set to make its submission on behalf of workers.
Earlier this month, Finance Minister Enoch Godongwana announced an additional R23 billion to cover a 5.5% public sector wage increase over the next three years, which workers expect to take effect next Tuesday.
However, concerns remain over the government’s revenue plans. Godongwana confirmed that VAT will increase by 0.5% in May 2025, followed by another 0.5% hike in April 2026, bringing the total VAT rate to 16%.
Although this is lower than the initially proposed 17% in the cancelled February 2025 budget, it remains a contentious issue among labour groups.
Speaking to VOC News, COSATU’s parliamentary coordinator, Matthew Parks, acknowledged some positives in the budget but criticized the planned tax increases.
“COSATU will be making its submission to Parliament today. There are many positives, such as wage agreements for public servants, filling critical frontline vacancies, rebuilding public services, and investing in infrastructure,” Parks said.
“However, we are concerned about the revenue proposals. We cannot agree to a VAT hike that disproportionately affects the poor. Equally, we believe personal income tax brackets should be adjusted in line with inflation. There are alternatives, such as strengthening SARS to tackle tax evasion and reducing tax burdens on low-income earners,” he added.
VOC News
Photo: PresidencyZA/X
