Finance Minister Enoch Godongwana has announced that he will re-table the 2025 Burdge Review on 21 May 2025.
These after the previous budget tabled earlier this month, was withdrawn following disagreements amongst members of the Government of National Unity (GNU) over the proposed 0.5 percentage points increase.
The proposal was also dealt a blow when the Western Cape High Court ordered that the VAT increase be suspended.
“This comprehensive review will include the Fiscal Framework, the Appropriation Bill, Division of Revenue Bill, and the already tabled Rates and Monetary Amounts and Amendment of Revenue Laws Bill.
This decision follows Minister Godongwana’s recent announcement and subsequent request to the Speaker of the National Assembly to maintain the Value-Added Tax rate at its current level of 15%, reversing the previously proposed 0.5 percentage point increase presented in the 12 March budget,” read a statement from Treasury.
The department said the revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act.
Meanwhile, Godongwana said the department must balance the budget without raising VAT, while protecting vital services like education, health and social grants.
“We must balance the budget, by managing our costs better.
Raising other taxes beside VAT, was not an option, as it would harm growth, savings and jobs.
Borrowing more would worsen our debt crisis, we already spent more than a billion rand a day servicing debt.
We must do more with less, review government spending critically, root out waste, and every cent of public money must be spent wisely,” said Godongwana.
The minister said to achieve this, the government must strengthen revenue collection and collect more money, particularly those who still owe the South African Revenue Service, and deal with illicit trading.
The minister said all proposals that were meant to cushion the impact because of VAT, will be removed, while those dealing with the social services affecting the poor, such as education, health and social protection, will remain.
Meanwhile, Godongwana has dismissed calls for his resignation following the budget impasse.
“It would be unfair to say to me having performed in terms of my constitutional obligations of proposing a money bill in parliament and getting to multi-party environment which created large attention and say I must resign.
At this stage, where I sit in that context, I think people must understand it that way.
That decision doesn’t lie with me, it lies with the president.
But I’m mindful of the fact that the president has been participating in this process, he understands the nature of the challenges we’ve been experiencing in dealing with this problem.
So, I don’t think I can answer that question and say that’s my intention now, no,” remarked the minister.
The department said until the new budget is passed, government services will continue to be funded under section 29 of the Public Finance Management Act.
This allows spending of up to 45% of last year’s budget during the first four months, and up to 10% for each month after that.
