African National Congress (ANC) Secretary General Fikile Mbalula underscored the importance of constructive discussions as the party navigates the legislative landscape following the budgetary vote. At a media briefing attended by representatives from 11 political parties that supported the passing of the budget amidst proposed reforms, a shift towards collaboration beyond the confines of the Government of National Unity (GNU).
The ANC’s renewed spirit of dialogue comes after the Democratic Alliance (DA) voiced opposition to a half-percentage-point increase in Value Added Tax (VAT), a proposal that has now been shelved. This reversal, while welcomed by the youth of Johannesburg, sparked a broader discussion regarding fiscal responsibility and the political intricacies that govern tax policies in South Africa.
Mbalula emphasised that moving forward, negotiations will be central to the legislative process. “We will have to negotiate everything else now in the Government of National Unity. If we want a new bill, there is a process; if we want to pass a budget like now, there is a process,” he stated. Acknowledging the complexities during these “uncharted waters”, he called for a structured dialogue concerning budget implications, extending discussions to all parties, not just those within the budget framework.
The call for constructive talks resonates with the sentiments of experts in the field. Professor Keith Engel, Chief Executive Officer of the South African Institute of Tax Professionals, remarked that the VAT increase is largely a political issue rather than a constitutional one. He defended Finance Minister Enoch Godongwana, stating that any blame for the VAT reversal should not rest solely on his shoulders, as it represents a collective decision made by the Cabinet.
Meanwhile, the decision to abandon the VAT increase has garnered appreciation from Johannesburg’s younger population, who expressed relief that their already stretched budgets would not face additional burdens. The potential increase was seen as a looming threat that would exacerbate financial struggles amidst an already challenging economic climate.