By Loushe Jordaan Gilbert
The Government of National Unity (GNU) has expressed mixed reactions to Finance Minister Enoch Godongwana’s plan to raise value-added tax (VAT) by 0.5 percentage points this fiscal year, followed by another 0.5 percentage point increase in 2026, bringing VAT to 16%.
Several political parties have voiced concerns, warning that the increase will hit the most vulnerable South Africans, who are already struggling with the high cost of living.
EFF: “The Poor Should Not Fund Infrastructure”
Speaking to VOC News, the Economic Freedom Fighters (EFF) Nazier Paulsen criticized the decision, arguing that the government should not burden the poor to finance infrastructure projects.
“Through the EFF’s participation in the Finance Committee, we will push for budget amendments and ensure that the required funds are raised through corporate tax and a wealth tax instead,” he said.
Western Cape Finance Minister: “Tax Increase is Unconscionable”
Western Cape Finance Minister Deidré Baartman called the VAT hike unacceptable, stating that households are already stretched beyond their limits.
“While the minister claims the increase is meant to fund pressures on provinces, especially in health and education, the national government has chosen the one option that will hit the poor and middle class the hardest,” she said.
GOOD Party: “Budget Accepted, But VAT Still a Concern”
GOOD Party Secretary-General Brett Herron said his party accepts the budget, given that the VAT increase was lowered and key spending on infrastructure, social services, and education remained intact.
“Had Minister Godongwana cancelled the R370 SRD grant, as he initially suggested to avoid a 2% VAT increase, GOOD would have voted against the budget,” he noted.
Al Jama-ah: “VAT Should Be Lowered, Not Raised”
Al Jama-ah Leader Ganief Hendricks acknowledged the finance minister’s data analysis efforts but described the VAT increase as disappointing.
“If anything, VAT should be reduced to 10%. We also expected more essential items to be zero-rated. The minister has shown little respect for senior citizens, essentially suggesting that they survive on canned vegetables and tripe—the only things they might now afford,” he argued.
ANC: “More Deliberations Needed”
ANC Western Cape provincial leader Khalid Sayed said further discussions are needed, as there is no broad consensus on the VAT hike.
“We are confident that parties under the GNU will work together in the interests of the people. We are pleased that social grants were not negatively impacted and that education funding ensures there are enough teachers, particularly in the Western Cape,” he said.
VOC News
Photo: X/ @GovernmentZA
