ANC Supports ActionSA’s Proposal to Scrap VAT Increase

The African National Congress (ANC) has backed ActionSA’s proposal to reverse the 0.5% VAT increase, providing taxpayers with much-needed relief.

During a parliamentary debate on the fiscal framework, the ANC proposed an amendment to the 2025/26 budget that would remove both VAT and income tax hikes. The party emphasised that South Africans should take note of which political groups are prioritising financial relief for households and which are engaging in political manoeuvring at their expense.

Budget Discussions and Conditional Support

Discussions between political parties took place on Sunday regarding the national budget. ActionSA highlighted concerns over the fiscal framework, warning that continued uncertainty within the Government of National Unity (GNU) could have serious economic consequences. As a result, the party conditionally agreed to support the budget’s passage, prioritising financial relief over broader budgetary reforms.

To address the revenue shortfall, ActionSA proposed alternative measures that would eliminate the need for additional tax hikes. The party argued that avoiding unnecessary tax increases is both achievable and necessary, urging political leaders to focus on practical solutions rather than engaging in political posturing.

DA’s Opposition to the Budget

While some parties are working towards a compromise, the Democratic Alliance (DA) remains firmly opposed to the proposed budget. DA leader John Steenhuisen expressed concerns over the ANC’s reluctance to finalise agreements on economic growth and spending reforms, warning that the ongoing deadlock threatens the stability of the GNU. The DA has made it clear that it will not support the budget unless a formal written agreement is reached.

With time running out, the divisions among political parties highlight the challenges of balancing economic priorities while maintaining coalition stability. The outcome of these negotiations will ultimately determine whether South Africans see meaningful relief or continued financial strain.