Negotiations continue ahead of vote on proposed budget

Eleventh-hour talks before MPs in the National Assembly are due to vote on the budget on Wednesday have not yet secured a breakthrough.

The ANC's partners in the government of national unity have made it clear they will support a budget that includes a proposed 0.5% VAT increase.

While discussions continue closed doors, parliamentary processes are underway to keep the state coffers open.

According to Parliament, lawmakers have 16 working days after the budget was tabled to approve the new fiscal framework and revenue proposals.

Members of Parliament have to approve the budget by Thursday.

If they fail to do so, the law allows the government to continue spending, but only up to a reported 45% of the previous year's budget.

Until Parliament approves a new budget, Finance Minister Enoch Godongwana cannot implement the new budgetary allocations, which also have to be approved by Parliament.

It is the first year that the approval of the budget is under such a spotlight because the national budget has always been approved in Parliament by a majority of the ANC.

Meanwhile, the Democratic Alliance and ActionSA have stood their ground on the proposed VAT increase.

The Democratic Alliance insists that there will be no value-added tax increase, saying that it demands the GNU partners draw up a budget to benefit the people of South Africa.

Addressing the media outside Parliament, the DA's spokesperson, Mark Burke, said the party have proposed two alternative budget adjustments to the Government of National Unity to benefit South Africans.

"The ANC has failed to agree to the reforms that we need to get the economy going, and if we get the economy going, for our revenue to increase over time so that we don't need to increase taxes and because of this refusal from the ANC to agree to reasonable, politically neutral measures, I have now been mandated to go into this committee and amend the fiscal framework such that there will be no VAT increases."

ActionSA has set strict conditions for its support of the 2025/26 national budget, demanding the removal of the VAT increase and a lack of inflation-based adjustments to income tax brackets.

On Sunday, the party met with the ANC to discuss viable alternatives to cover the revenue gap without burdening South Africans with additional taxes.

The party warns that ongoing uncertainty around the country's fiscal framework could have disastrous consequences.

ActionSA's Alan Beesley said the party put forward solutions to protect South Africans from excessive taxation and worsening economic pressures.

"The final explicit requirement for ActionSA’s strict conditional support of the budget is the removal of the VAT increase and the lack of an inflation-based adjustment to income tax brackets. ActionSA has put forward viable alternatives to cover the revenue gap, which we have done to show that protecting South Africans from unnecessary tax hikes is both possible and necessary without political grandstanding."

Beesley further reiterated the party's position on tax increases.

"ActionSA will propose an amendment to the fiscal framework to remove the VAT and income tax increases for 2025/2026. All that remains is for South Africans to observe which political parties acted to protect their already strained household income and which parties saw them as collateral damage in political manoeuvring."