Minister of Finance Enoch Godongwana’s proposed 2025 budget speech sparked strong opposition from various political parties.
In Wednesday’s budget speech, Godongwana proposed that the country’s VAT rate will increase by 0.5 percentage points in both 2025 and 2026, bringing the VAT rate to 16% by 2026 and 2027.
While the ANC argues that the budget is essential for fiscal responsibility, opposition parties also rejected other key elements as a lack of substantial economic reforms.
The Economic Freedom Fighters (EFF) has condemned the 2025 budget, labelling it a product of “right-wing neoliberal” policies.
EFF spokesperson Sinawo Tambo says: “The EFF reiterates that South Africa does not have a guiding economic policy framework that links government spending with sustainable economic growth, development, and job creation to reduce poverty and inequality.
“A delayed and prolonged increase in VAT over a two-year period remains detrimental to the poor and middle-class and is an unviable option to generate revenue.”
The Democratic Alliance (DA) echoed the EFF’s opposition to the VAT hike but framed their critique around the ANC government’s failure to implement necessary economic reforms.
DA leader John Steenhuisen states: “The DA had previously made it clear to the ANC in the Government of National Unity (GNU) that they would not support any permanent tax hikes unless accompanied by major reforms to foster economic growth and reduce waste.
Meanwhile, the Freedom Front Plus (FF Plus) also condemned the proposed VAT increase, warning that it will stifle economic growth.
In addition, the FF Plus criticised the financial burden placed on taxpayers by Black Economic Empowerment (BEE) policies.
FF Plus chairperson Wouter Wessels says: Ordinary South Africans are paying the price for BEE, which is nothing but cadre enrichment through inflated prices for goods and services, running counter to all sound economic principles.”
Free SA proposed reducing the cabinet size from 77 to 26 members, potentially generating annual savings of R130 million in salaries alone and billions more in overheads.
Their proposal includes devolving certain responsibilities to provincial governance and consolidating overlapping ministries.
Reuben Coetzer, spokesperson for Free SA says: "Streamlining the cabinet will not only save substantial taxpayer money but also enhance efficiency, transparency, and accountability in public administration.
Their proposal includes devolving certain responsibilities to provincial governance and consolidating overlapping ministries.
Coetzer adds: “Suggested eliminations include ministries such as Basic Education, Employment and Labour, Health, and Police, whose functions could be effectively managed at the provincial level, enhancing accountability and responsiveness to local needs.”