By Zukile Majova
- DA uses its new power to stop ANC from raising VAT by 2%, forcing a delay in the budget speech.
- The government must now find new ways to raise R300-billion as DA refuses to support taxing poor people more.
The DA has stopped the ANC from raising Value Added Tax (VAT) by 2% in a show of its new power in parliament.
This is perhaps the biggest clash in President Cyril Ramaphosa’s Government of National Unity (GNU), forcing Finance Minister Enoch Godongwana to delay his budget speech to 12 March.
The government needs R300-billion to fill its money shortfall, but the DA says making the poor pay more tax is wrong.
“Today’s Budget Speech has been postponed following intense DA pressure against a proposed 2% VAT increase by the ANC. If included in the budget, the DA was prepared to vote against it,” the DA said on Wednesday.
The ANC wanted to raise VAT from 15% to 17%. This would have been the second increase since 2018 when VAT went up from 14% to 15%.
While the ANC promised to add more basic foods to the list of items that don’t get taxed, DA leader John Steenhuisen said his party would still reject the budget.
As the second biggest party in the GNU, the DA can force talks through Clause 19 of the GNU Statement of Intent. This rule says parties must solve problems by agreement.
The ANC needs the DA’s support because the rules say decisions need backing from parties that hold 60% of parliament seats. Only the ANC and DA together have this many seats.
DA Chief Whip George Michalakis said the delay shows parliament won’t just accept “bad policies that will cripple our economy”.
Godongwana said: “A postponement is needed to allow for further deliberations to take place on the budget.”
Pictured above: John Steenhuisen.
Image source: @jsteenhuisen
