Market welcomes Budget 3. 0 as finally resolving the VAT impasse
Finance Minister Enoch Godongwana has announced the date for the third Budget speech, highlighting the impact of recent VAT discussions and the importance of coalition politics in South Africa.
Image: GCIS
The local currency is on a roll, dropping below the R18.50 market following the news that National Treasury will have a third stab at the National Budget.
Finance Minister Enoch Godongwana on Wednesday said that National Treasury will table Budget 3.0 on May 21. This follows seemingly endless disagreements between political parties over a contentious hike in the VAT rate.
On the first day of trading following his pronouncement, the rand had gained from R18.89 on Wednesday's close to R18.45 as of mid-morning on Friday. Although US President Donald Trump's vacillatory position regarding his tariff trade war adds to this improvement, stability in the Government of National Unity contributed much to the increase.
The Government of National Unity was on rocky ground following sabre rattling from the coalition's second largest party, the Democratic Alliance, which threatened to leave the multi-party government.
Generally, markets react adversely to political uncertainty. The JSE's All Share index was up almost a percent on Friday morning.
Investec chief economist, Annabel Bishop, said earlier this week that the currency had moved back to R18.60 against the dollar as per their forecast for the first quarter of the year. This follows it hitting R19.93 early last month on fears the DA would exit the government of national unity, which worried investors and financial markets.
After the first Budget failed to be passed in February – with a proposed VAT hike from 15% to 17% – it was tabled again in March, being approved by a slim majority. This spending plan was based on a fiscal framework that dropped the proposed increase to 15.5%.
However, after some confusion as to whether this included the 0.5 percentage point increase in tax at the till points, the DA and EFF joined forces to have this overturned in the Western Cape High Court.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
TimesLIVE
4 hours ago
- TimesLIVE
Yemen's Houthis target Israel with ballistic missiles in co-ordination with Iran
Yemen's Iran-aligned Houthis said on Sunday they targeted Israel in co-ordination with Iran, the first time an Iran-aligned group has publicly announced joint co-operation on attacks with Tehran. The Yemeni group targeted central Israel's Jaffa with several ballistic missiles in the past 24 hours, military spokesperson Yehya Sarea said in a televised address. 'Triumphing for the oppressed Palestinian and Iranian peoples ... This operation was co-ordinated with the operations carried out by the Iranian army against the criminal Israeli enemy,' he added. The Israeli military earlier said sirens were activated in several areas in the country after missile launches from Iran and Yemen. Israel and Iran continued to exchange missile attacks since Israel launched its biggest-ever military strike against its long-standing enemy on Friday. On the same day Israel launched its attack on Iran, Israel said a missile that was launched from Yemen towards Israel fell in Hebron in the occupied West Bank. The Yemeni group however did not claim responsibility for the missile launch. The Houthis have been launching attacks against Israel, most of which have been intercepted, in what they say is support for Palestinians in Gaza during the Israel-Hamas war there since Hamas' October 7 2023 attack on Israel. Israel has carried out a series of retaliatory strikes. The US also launched intensified strikes against the Houthis this year, before President Donald Trump halted the offensive after the Houthis agreed to stop attacks on American ships.
IOL News
4 hours ago
- IOL News
Trump issues chilling threat as Israel and Iran exchange fire overnight
A fire blazes in the oil depots of Shahran, northwest of Tehran, on June 15 after further attacks from Israel. Image: Atta Kenare / AFP Iranians and Israelis woke to smoke and rubble on Sunday after the arch-rivals expanded their attacks overnight, with Israel striking Tehran's defence ministry, and Iran unleashing a deadly barrage of missiles. Air raid sirens and explosions were heard by AFP journalists in Jerusalem and Tel Aviv early on Sunday, as Israel's military said millions of Israelis were "running for shelter" around the country. Israel's emergency services said at least eight people, including children, were killed in the overnight strikes, and around 200 were wounded. In Iran's capital, AFP journalists heard a series of blasts at around 2:30am. The third day of tit-for-tat attacks comes despite global calls for de-escalation, with Iran scrapping its latest nuclear talks with the United States, saying it could not negotiate while under fire from Israel. US President Donald Trump warned Iran on Sunday that it would experience "the full strength" of the US military if it attacks the United States, reiterating that Washington "had nothing to do" with Israel's strikes on Tehran's nuclear and intelligence facilities. 'Nuclear project' sites struck After decades of enmity and conflict by proxy, it is the first time the arch-enemies have traded fire with such intensity, triggering fears of a prolonged conflict that could engulf the Middle East. Israel's operation, which began early on Friday, has targeted Iranian nuclear and military sites, killing dozens of people including top army commanders and atomic scientists, according to Tehran. Israeli Prime Minister Benjamin Netanyahu has vowed to hit "every target of the ayatollah regime", while Iranian President Masoud Pezeshkian warned further strikes would draw "a more severe and powerful response". Iran's UN ambassador said 78 people were killed and 320 wounded in Friday's first wave of Israeli strikes. Iranian authorities have not provided an updated toll as of early Sunday. Israel's military said it had struck Iran's defence ministry headquarters, "nuclear weapons project" infrastructure sites and other targets, including fuel tankers, just before 2:40am on Sunday. The targeted sites, including the "headquarters of the SPND (Organisation of Defensive Innovation and Research) nuclear project", advanced Iran's efforts to obtain a nuclear weapon, according to Israel. Iranian news agency Tasnim earlier reported that an Israeli strike had targeted the defence ministry headquarters in Tehran and damaged one of its buildings. The ministry did not comment. Iran's Revolutionary Guards said on Sunday that the country had struck sites used by Israeli warplanes for refuelling, in retaliation for the strikes carried out by Israel. "The Iranian armed forces' offensive operations will continue more fiercely and more broadly if the depravity and attacks (against Iran) continue," the Guards said in a statement. Overnight, Israel stuck two fuel depots in Tehran, the Iranian oil ministry said on Sunday. According to the ministry, the oil depots at Shahran, northwest of Tehran and another reservoir south of the city were hit. Washington's 'dishonesty' Netanyahu maintained Israel's operation had the "clear support" of US President Donald Trump. Trump said he and Russian President Vladimir Putin had agreed in a phone call on Saturday that the conflict between Iran and Israel "should end". According to a statement from his office, Iranian President Masoud Pezeshkian condemned Washington's "dishonesty" for supporting Israel while engaged in nuclear talks with Iran - which mediator Oman said would no longer take place on Sunday. Western governments have repeatedly accused Iran of seeking a nuclear weapon, which it denies. Iran's top nuclear negotiator, Foreign Minister Abbas Araghchi, said the Israeli attacks undermined negotiations and were pushing the region into a "dangerous cycle of violence". Israeli strikes have hit Iran's Natanz uranium enrichment plant and killed its highest-ranking military officer, Mohammad Bagheri, as well as the head of the powerful Islamic Revolutionary Guard Corps, Hossein Salami. The Israeli military said its strikes had killed more than 20 Iranian commanders. Iranian media reported five Guards killed Saturday in Israeli strikes, while authorities in one northwestern province said 30 military personnel had been killed there since Friday. Iran's Red Crescent said an ambulance was hit Saturday in Urmia city, killing two. Iran called on its citizens to unite in the country's defence, while Netanyahu urged them to rise up against the government. Highlighting the global unease, Turkish President Recep Tayyip Erdogan warned against a "devastating war" with regional consequences, in a call with Saudi Crown Prince Mohammed bin Salman, Ankara said. UK Prime Minister Keir Starmer said Saturday that his country was deploying fighter jets and other "assets" to the Middle East "for contingency support", while he also urged de-escalation. AFP
TimesLIVE
4 hours ago
- TimesLIVE
Israel and Iran strike at each other as Trump says conflict can be easily ended
Israel and Iran launched fresh attacks on each other overnight into Sunday, as US President Donald Trump said the conflict could be easily ended while warning Tehran not to strike any US targets. Israeli rescue teams combed through the rubble of residential buildings destroyed in strikes, using flashlights and sniffer dogs to look for survivors after at least seven people were killed, including children, authorities said. Tehran has called off nuclear talks that Washington had said were the only way to halt Israel's bombing, while Prime Minister Benjamin Netanyahu said the attacks by Israel so far were nothing compared with what Iran would see in the coming days. 'If we are attacked in any way, shape or form by Iran, the full strength and might of the US Armed Forces will come down on you at levels never seen before,' Trump said in a message on Truth Social. 'However, we can easily get a deal done between Iran and Israel, and end this bloody conflict.' Trump gave no details of any possible deal. Iran has said 78 people were killed there on the first day of Israel's campaign on Friday, and scores more on the second, including 60 when a missile brought down a 14-storey apartment block in Tehran, where 29 of the dead were children. The Shahran oil depot in Tehran was targeted in an Israeli attack, Iran said, but added the situation was under control. A fire had erupted after an Israeli attack on an oil refinery near the capital while Israeli strikes also targeted Iran's defence ministry building, causing minor damage, the semi-official Tasnim news agency said on Sunday.
