This afternoon, South Africa’s Finance Minister, Enoch Godongwana, will return to Parliament to re-table the 2025 Budget Review, reiterating a commitment to maintaining fiscal stability while adjusting important tax policies. The session is set to take place during a plenary meeting in the National Assembly at the Cape Town International Convention Centre at 2 PM.
In a significant turn of events, Minister Godongwana recently announced his intention to keep the Value-Added Tax (VAT) rate unchanged at 15 percent, reversing a prior proposal for a 0.5 percentage point increase put forth in the initial budget presented on 12 March. “The revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act,” the National Treasury stated, emphasising the inclusive approach taken towards the budget revision.
To comply with legislative requirements, the Minister has engaged in formal consultations with the Financial and Fiscal Commission, and obtained thorough support from all political parties within the Government of National Unity, alongside securing Cabinet approval. This framework indicates a cooperative effort to build consensus around fiscal policies crucial for South Africa’s economic future.
The National Treasury has taken considerable steps towards developing a new fiscal framework aimed at stabilising the country’s debt trajectory, which is essential for enhancing public finances. This comprehensive process involved:
- Revising economic assumptions using the latest available data.
- Generating updated fiscal projections.
- Recalculating revenue projections and tax implications.
- Determining appropriate borrowing strategies.
- Consolidating these elements into a coherent and sustainable fiscal framework.
Godongwana’s forthcoming speech is expected to outline how these changes and strategies will fortify the nation’s economic standing, not only to foster growth but also to reassure stakeholders of the government’s financial discipline and commitment to responsible fiscal management.