Calls for Godongwana's resignation grow over VAT blunder
Government will now have to find some other way of plugging a revenue hole of at least R75 billion after bowed to pressure and scrapped an increase in VAT.
Image: Armand Hough / Independent Newspapers
Lungani Zungu and Mashudu Sadike
THE noose is tightening around the neck of Finance Minister Enoch Godongwana following the controversial Value Added Tax (VAT) increase blunder, which has sparked legal battles, public outrage, and deep political divisions within the Government of National Unity (GNU).
Veteran economist Dawie Roodt, who has analysed South African budgets for four decades, made his feelings know during a candid interview with the Daily News, where he called for Godongwana's immediate resignation.
'This is unprecedented. In the 40 years I have analysed this country's budgets, I've never seen a finance minister make such a serious misstep,' said Roodt.
Roodt's utterances come amid the rising calls for Godongwana's resignation or sacking by President Cyril Ramaphosa, who has the powers to appoint and remove Cabinet ministers.
Roodt also called on Ramaphosa, who made Godongwana's appointment in 2021 to the plum position of handling the country's purse, to step down.
The initial proposal to increase VAT by 2% triggered strong backlash from political parties, trade unions, and civil society. Under intense pressure, Godongwana revised the proposal to a 0.5% hike, but this too was challenged in court by the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF).
Before the court could rule, Godongwana caved in, withdrawing the proposal, citing an out of court legal settlement with the DA.
The Western Cape High Court later suspended the VAT increase and set aside the 2025 Fiscal Framework and Revenue Proposals, which only served to intensify the scrutiny on the minister.
Despite the U-turn, Godongwana maintained that the proposal was both constitutional and necessary, considering a R75 billion shortfall in the national budget.
Roodt said the VAT blunder had far-reaching implications for South Africa's economy. 'Markets have lost confidence. Investors were watching this chaos and re-evaluating their positions,' he warned.
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Advertisement
Video Player is loading.
Play Video
Play
Unmute
Current Time
0:00
/
Duration
-:-
Loaded :
0%
Stream Type LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text Color White Black Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan
Transparency Transparent Semi-Transparent Opaque
Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps
Reset
restore all settings to the default values Done
Close Modal Dialog
End of dialog window.
Next
Stay
Close ✕
Political backlash has been fierce with the EFF and the uMkhonto weSizwe Party (MK Party), led by Julius Malema and Jacob Zuma respectively, having been vocal in demanding Godongwana's resignation.
The MK Party has gone a step further, tabling a motion of no confidence in him in Parliament and accused the minister of fiscal mismanagement and promoting 'neoliberal dogma.'
'South Africans deserve leadership that rejected austerity and market fundamentalism,' the MK Party said. It called for nationalising the South African Reserve Bank and mandating it to focus on growth and employment alongside inflation control.
MK Party spokesperson Nhlamulo Ndhlela also criticised the GNU's Economic Reconstruction and Recovery Plan (ERRP), calling it a 'blueprint for mass impoverishment.'
He accused the ANC and DA of engaging in a political charade while advancing similar policies that deepen inequality.
EFF leader Malema echoed the demand for Godongwana to step down, noting that the finance minister's missteps had left South Africa without an approved budget nearly three months after the State of the Nation Address in February. 'How can a government function without a budget?' Malema asked.
Independent political analyst Thobani Zikalala agreed that the crisis extended beyond Godongwana. 'This isn't just about one man. The entire Cabinet, including the president, must take responsibility for this failure,' he said.
Zikalala questioned whether the GNU could be trusted to govern. 'They can't even agree on a fiscal framework. How can South Africans have confidence in a government that's still squabbling over the basics?'
The DA, a key partner of the GNU, has been vocal against VAT hike which has caused serious cracks in the GNU formed after the last year's national elections failed to produce an outright winner.
The other parties that were in the GNU were IFP, the PAC, Freedom Front Plus, UDM, Rise Mzansi, Al Jama-ah, Patriotic Alliance and GOOD Party.
The ANC, while defending Godongwana, acknowledged the legal ruling as providing 'certainty' and said Parliament must now determine how to proceed with revenue and expenditure adjustments.
Meanwhile, the South African Revenue Service (SARS) has warned of the practical implications of reversing the VAT hike. SARS Commissioner Edward Kieswetter said vendors must continue charging VAT at the standard 15%, not the planned 15.5%. 'SARS will ensure all necessary adjustments are made to implement the reversal,' he said.
The debacle has raised broader concerns about the GNU's ability to manage the economy during a time of escalating fiscal pressure. With investor confidence shaken and South Africans increasingly disillusioned, the future of Godongwana, president Ramaphosa and possibly more members of the Cabinet, hangs in the balance.
WhatsApp your views on this story at 071 485 7995
DAILY NEWS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mail & Guardian
an hour ago
- Mail & Guardian
EFF loses fuel levy court challenge
EFF leader Julius Malema. (X) The The party's application, lodged against Finance Minister The EFF argued that it was unlawful because it was not introduced through a Money Bill, as required by section 77 of the Constitution. The party described the court's ruling as 'a betrayal of the poor and the working class' and accused Godongwana's office of sidestepping democratic procedures in the management of public finances. 'Taxation without representation is arbitrary and unconstitutional,' the party said. The ANC-led government of national unity was doing everything in its power 'to protect the interests of those who continue to benefit from the apartheid economy, while subjecting the masses of our people to economic misery'. Godongwana has insisted that he acted within existing legislation. In his He added that it had been frozen since 2021, and the increase was necessary to preserve the real value of the levy in the face of inflation and declining revenue. He warned that halting the increase would result in a R3.5 billion shortfall for the fiscus, necessitating further borrowing, spending cuts or alternative tax increases. 'The fuel levy is not a new tax. It is a regulatory adjustment falling under existing legislation and its increase does not require a Money Bill,' Godongwana argued in the affidavit, adding that freezing the levy any further would compromise the integrity of the budget and limit the state's ability to deliver services. The court's ruling allowed the increase to proceed and, on Wednesday, fuel prices rose accordingly for the month of June. However, a dip in global oil prices and modest strengthening of the rand brought slight relief for motorists. EFF leader 'It is not the EFF that got rejected; it is the people of South Africa who lost. When you increase fuel, you increase everything, transport, food, the cost of living. Our people are already suffering. This is an extra blow to the working class,' he said. The EFF would not abandon the matter, Malema said, indicating that it was considering further legal avenues, as well as a legislative push in parliament to close loopholes that allow the treasury to act unilaterally. EFF treasurer general Omphile Maotwe, who has led the party's engagements on budget matters, reiterated its position that the matter should have come before parliament. 'The levy seeks to recover revenue after the courts invalidated the unlawful VAT increase proposed earlier this year. By using the Customs and Excise Act to bypass section 77 of the Constitution, the minister is undermining the democratic function of parliament and the people's right to participate in fiscal policy decisions,' she said. Maotwe said the EFF would submit proposals to amend the relevant sections of the Customs and Excise Act and the Money Bills Amendment Procedure and Related Matters Act to ensure no future taxation could be implemented without a parliamentary vote. While the EFF's application was dismissed, legal observers say the court did not definitively rule on the constitutional questions raised, which could leave the door open for further challenge. While the government is technically within its rights to use the Customs and Excise Act to amend levies, the broader question of public accountability in tax decisions remains unresolved, constitutional law expert professor Pierre de Vos said. 'There's a grey area here. The Constitution requires that money bills originate in the National Assembly, but there are long-standing statutes like the Customs and Excise Act that give the executive certain powers. Whether those powers are now unconstitutional is a debate we may see return to the courts.' The EFF said it would use all platforms, legal and political, to hold the treasury accountable. 'We will not rest while unelected officials continue to impose taxes behind the back of parliament. The people must have a voice in every cent that is taken from their pockets,' Malema said.
IOL News
an hour ago
- IOL News
Trump's false claims: challenging negative narratives with the warmth and beauty of the 'rainbow nation'
US President Donald Trump uses an image taken in Congo as proof of his claims that there is a genocide against Afrikaner farmers in South Africa. Image: AFP Amidst the backdrop of misinformation surrounding South Africa's socio-political landscape, South African Tourism invites the world to experience the country's rich diversity and vibrant culture, challenging negative narratives with the warmth and beauty of the 'Rainbow Nation'. This comes in the wake of a controversial meeting between President Cyril Ramaphosa and US President Donald Trump, where unfounded claims regarding genocide against Afrikaner farmers in South Africa were raised. During their meeting last month in the Oval Office, Trump labelled the situation facing Afrikaner farmers as one of 'genocide". However, Ramaphosa denied these claims, asserting that while South Africa faces significant crime challenges, they affect citizens across all racial backgrounds and he asked for assistance to address the high levels of crime. As international scrutiny mounts, a second wave of Afrikaners landed in the US last week under Trump's controversial resettlement programme that will eventually see 8,000 individuals relocating. In 2018, during his first term in office, Trump referred to countries on the African continent as 'shithole countries'. According to reports, in addressing concerns about false narratives affecting South Africa's global image, Michael Delaney, general manager of Radisson RED Johannesburg-Rosebank, cautioned against narratives seeking to make South Africa look bad and argued the importance of highlighting the country's positive attributes. 'Many of the misconceptions can be countered by showcasing the friendliness of its people, natural beauty, and cultural diversity,' he said, noting that most international visitors' perceptions of South Africa tend to improve significantly once they arrive. Trump's religious advisor, Pastor Mark Burns, visited South Africa to investigate the alleged genocide of white Afrikaner farmers. He later dismissed the EFF and Julius Malema as attention seekers for chanting 'Kill the Boer, kill the farmer.' Tourism bodies and an international relations specialist responded to inquiries about the actions taken and necessary measures needed to challenge Trump's genocide narrative. Toni Gumede, manager in the office of the CEO of Brand South Africa, said since Trump took office, Brand SA has consistently responded to his statements in line with the country's values. 'Ours is to continually drive messaging that not only balances whatever the narrative may be in the environment, but to highlight facts from misinformation in all our touchpoints domestically and internationally,' she said. She said Brand SA's nation branding mandate encompasses the promotion of South Africa's image, competitiveness, institutional credibility, and attractiveness for investment, tourism, trade, and skills mobility. 'Brand South Africa is tasked with improving how South Africa is perceived globally. The objective is to position the country as an attractive destination to invest in, visit, work, study, or do business with,' she said. Gumede said as an organisation, Brand SA continuously implements both proactive and reactive strategies through communications, marketing, and stakeholder engagements across the globe to ensure that we influence perceptions about the country. 'We work with and through a broad spectrum of partners and stakeholders, including business, civil society, and government,' she said. Some of the issues that Brand SA has addressed is South Africa's Expropriation Act of 2025 and the legacy of land dispossession among others. Gumede said Brand SA also drives a domestic programme called Play Your Part to get South Africans involved in positive social impact, including those in the diaspora, our very own Global South Africans, and ensure visibility/messaging about South Africa at global platforms like WEF, the recent SA-France investment Forum, and many others. 'According to the 2025 Global Reputation Study conducted by Bloom Consulting and Brand SA, South Africa's global brand equity is on an upward trajectory, with five out of six key dimensions showing improvement: Exports, Investment, Tourism, Work, and Study,' she said. Gumede said taken together, these results affirm the strategic value of Brand South Africa's interventions globally. 'Nearing or exceeding global affinity thresholds in Exports and Investment, and showing resilience across other dimensions, the nation brand is increasingly seen as credible, competitive, and globally connected which is a critical enabler for trade, tourism, and human capital attraction,' she said. Global manager PR and communications for South African Tourism, Thandiwe Mathibela, said South Africa stands ready to welcome travellers from across the globe. 'We invite the world to discover the joy of South Africa - for a memorable, long-lasting experience,' she said. Home to over 60 million people, Mathibela said South Africa celebrates unity in diversity. 'The spirit of ubuntu — shared humanity — defines our national character. South Africa's social fabric is defined by the everyday coexistence of people from diverse backgrounds, reflecting the stability and cohesion that support our broader economic and tourism environment.' In 2024, Mathibela said over 8.5 million international visitors chose South Africa, with continued growth from markets including the US, UK, Germany, China, and the rest of Africa. 'As we prepare to host the G20 Leaders' Summit in November this year, our ability to deliver secure, high-level global events has been reaffirmed,' she said. Mathibela emphasised that safety is a priority, and that the government is actively investing in traveller safety through expanded safety monitor programmes and infrastructure upgrades. 'South Africa continues to invest in quality-assured tourism facilities to ensure high service excellence and seamless sustainable visitor experience.' International relations expert André Thomashausen argued that South Africa should rely on facts and refer to the recently updated "Investigative Report on White Murders in South Africa Since 1992" by the European Centre for Information Policy and Security ( He said this is an unbiased assessment that records 12,567 farm attacks over the past 3 decades and that this cannot be 'wished away.' The report states that in 2019 alone, there were 552 attacks and 57 murders, primarily targeting white farm owners and their families, and although white farmers are disproportionately affected due to their prevalence in commercial farming, farm workers and smallholders of all races are also victims. Robbery is the main motive, with racially or politically motivated attacks being rare. The report recommended improved intelligence, data transparency, crime prevention strategies, and balanced public communication to tackle farm attacks amidst South Africa's complex environment. 'The SA government count since 1994 indicates 3,398 murdered farmers. The Wikipedia entry on 'South African Farm Attacks' refers to a murder rate of 274 per 100,000 farmers, as against a national average of 61 per 100,000,' said Thomashausen. Thomashausen said South African farmers make up the profession suffering from the highest murder risk, in South Africa and even globally. 'It is good that the recent presidential meeting in Washington DC has refocused the debates on South Africa's inequality index, giving it [the] worst Gini coefficients recorded anywhere. This cannot be resolved by 'nationalising' relative and absolute wealth but only by an aggressive economic growth and employment policy,' he said. According to Thomashausen, the meeting in Washington DC behind closed doors focused on how to overcome the development failure in the South African economy. 'Hopefully this will reflect in the abolishment of tariffs on both sides and stronger foreign investment support for South Africa.' [email protected]
The South African
an hour ago
- The South African
Two Oceans Marathon organisers respond to High Court ruling
The Two Oceans Marathon NPC has responded to the ruling handed down by the Gauteng High Court on Thursday. The social media post read: 'The Two Oceans Marathon NPC acknowledges the recent High Court judgment concerning public commentary made about the organisation and its leadership. 'While the matter was dismissed, we note that the judgement was based on procedural grounds – 𝙣𝙤𝙩 on the factual correctness, ethical appropriateness or moral acceptability of the statements made. It therefore cannot be said that the statements made were found to be truthful, justified, or ethically appropriate. 'As an organisation, we welcome constructive criticism and learn profoundly from it. However, we believe that such engagement must be 𝘳𝘦𝘴𝘱𝘰𝘯𝘴𝘪𝘣𝘭𝘦, 𝘳𝘦𝘴𝘱𝘦𝘤𝘵𝘧𝘶𝘭, 𝘢𝘯𝘥 𝘮𝘪𝘯𝘥𝘧𝘶𝘭 𝘰𝘧 𝘵𝘩𝘦 𝘳𝘪𝘨𝘩𝘵𝘴 𝘢𝘯𝘥 𝘥𝘪𝘨𝘯𝘪𝘵𝘺 𝘰𝘧 𝘢𝘭𝘭 𝘪𝘯𝘥𝘪𝘷𝘪𝘥𝘶𝘢𝘭𝘴, including runners, those who serve the organisation, suppliers and stakeholders. 'As one of Africa's most iconic running events, we value fair criticism and a spirit of public engagement that falls within the boundaries of what can be considered fundamentally decent and respectful.' In the Gauteng High Court case between Two Oceans chairperson Toni Cavanagh (first applicant) and the Two Oceans Marathon NPC (second applicant) and Stuart Mann (respondent), the Honourable Judge Yacoob ruled emphatically against Cavanagh and the TOM NPC granting a costs order on scale C (the most severe possible outcome). This will reportedly cost Cavanagh and the TOM NPC around R400 000. Whether Cavanagh will cough up the cash herself or turn to the NPC for help remains to be seen. The full 15-page judgement can be found HERE This developing news story is being updated and more details will be published shortly. Please refresh the page for the fullest version. The future of the Two Oceans Marathon is in serious doubt after the City of Cape Town pulled its sponsorship of the event following a number of flagrant contraventions of conditions by the organisers of this year's race. Organisers were on the receiving end of more criticism this year – as is seemingly the case every year – as runners took to social media in their droves to vent their unhappiness and frustration. Runners lashed out at the organisers for – among many other things – shocking (read: no) communication pre-race, a lack of sufficient markings on the trail race, goodie bags hardly worth taking home, a lack of water tables during the race and running out of medals for finishers. Race director Hilton Kearns is on record as saying they 'overcompensated in predicting the number of silver medallists they expected and did not have enough bronze medals'. This was proven to be a lie by well-known South African runner and blogger, Stuart Mann, who, writing on his blog ' The Running Mann ' this week exposed the latest untruth. Mann ran the numbers and the percentage of silver medallists in the Two Oceans Half Marathon has been the same for the last three years: 1.3%. A mere 234 runners earned silver medals, while 17 443 runners earned bronze this year. The real reason the race ran out of thousands of bronze medals was the fact they accepted – and took payment for – more entries than they were allowed by the City of Cape Town. Meanwhile, according to Two Oceans chairperson Toni Cavanagh, the race has struggled to rope in enough sponsors since emerging from the Covid pandemic a few years ago. While they appreciated the support from current headline sponsor Totalsports – and the runners who paid entry fees – they are falling short of the claimed nearly R27 million required to organise the event. RELATED | Tributes pour in for runner after tragic death at Two Oceans Marathon In the irony of all ironies, just two short years ago prior to taking over as Two Oceans chairperson, Cavanagh took to social media to slate the race organisers following her 'fudging ridiculous' experience at race collection back in 2023. The South African website has in its possession a letter of demand to cease and desist from the Two Oceans Marathon NPC and Toni Cavanagh sent to Mann on Wednesday. The South African website also has it on good authority that Mann plans to neither cease nor desist from exposing the truth. It appears clear that the City of Cape Town is siding with Mann – and the truth. In a response sent to The South African website on Thursday, the City confirmed: 'Following the Two Oceans Half Marathon on Sunday, 6 April 2025, the City of Cape Town's Events Permitting Office discovered that the Two Oceans Marathon race management allowed more participants to take part in the half marathon than what was approved in the official permit. 'The Two Oceans Marathon race management contravened conditions of its permit and subsequently the Events By-Law by allowing more than the permitted number of runners to take part. 'This is a complete disregard of the months of work behind the scenes to plan the logistics and safety measures in place around the event. 'The contravention of stipulated permit conditions places at risk the safety of people taking part in events. 'The sponsorship agreement between the City of Cape Town and the agreement between the City and the Two Oceans Marathon NPC is clear that any breach of permit will result in the municipality pulling sponsorship of the event. 'The Two Oceans Marathon NPC was notified of the City's decision withdraw support on 10 April 2025. 'The City provides support in kind in the form of municipal services which assist in the event safety and logistics planning for the Two Oceans Marathon. 'The City's actions pertain specifically to its sponsorship of the Two Oceans Marathon – the Event Organiser can continue to apply for permits through the normal channels, as they are required to do in any event – irrespective of City sponsorship.' Quite how the Two Oceans Marathon plans on holding an event without the sponsorship of the City of Cape Town remains to be seen, considering the lack of funding alluded to by the organisers themselves. Whether any other sponsors wish to come on board and be associated with the race and its current Board remains to be seen. In addition, race founder Celtic Harriers (a club which still receives royalties from the Two Oceans brand, but is no longer involved in the organisation) has said it wants to meet with the Two Oceans board out of concern for the future of the race. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
