The African National Congress (ANC) has endorsed ActionSA’s proposal to scrap the planned 0.5% VAT increase, aiming to provide relief for taxpayers already facing economic strain.
ActionSA introduced an amendment to remove both the VAT and income tax increases proposed for the 2025/2026 fiscal year during Tuesday’s parliamentary joint committee on finance debate.
ActionSA representative Alan Beesley confirmed that discussions held on Sunday between the parties were focused on shielding citizens from further financial pressures and addressing declining service delivery. He emphasized the necessity of the amendment to protect household incomes from unnecessary tax burdens amid growing economic challenges.
“Given the imperfect state of the proposed budget and the current uncertainty created by the Government of National Unity (GNU), which could have catastrophic economic repercussions if left unresolved, ActionSA chose to prioritize urgent taxpayer protections over broader reforms,” Beesley stated.
He further explained that ActionSA had offered feasible alternatives to cover any revenue gaps, demonstrating that avoiding tax hikes was both feasible and essential without resorting to political gamesmanship.
Meanwhile, the Democratic Alliance (DA) remains firm in its opposition to the budget proposal. DA leader John Steenhuisen voiced concerns on social media, accusing the ANC of jeopardizing the GNU by refusing to finalize agreements on economic growth and spending reforms. Steenhuisen warned that the DA would continue opposing the budget unless a concrete, written agreement is established.
The stalemate highlights significant tensions within the GNU, raising concerns about the stability of South Africa’s governance and economic direction.
