Latest news with #AppropriationBill
IOL News
29-05-2025
- Business
- IOL News
KwaZulu-Natal 2025 budget re-tabled with no changes despite VAT increase withdrawal: Here's why
KwaZulu-Natal's 2025/26 Provincial Budget was officially re-tabled on Thursday by MEC for Finance Francois Rodgers following a national fiscal disruption caused by the withdrawal of the proposed VAT increase. Despite this unexpected development at the national level, Rodgers confirmed that the province's fiscal framework remains entirely unchanged. In his address to the Provincial Legislature, Rodgers reaffirmed the sequence of events that led to the re-tabling. The budget had initially been tabled on March 25, 2025, within the stipulated two-week window following the national budget announcement on March 12, as per Section 27.2 of the Public Finance Management Act (PFMA). However, with the subsequent withdrawal of the Division of Revenue Bill and the Appropriation Bill on April 24, due to the removal of the VAT increase and a revised fiscal framework, Rodgers was compelled to withdraw the provincial budget and formally communicated this to the Legislature on May 7. Rodgers said, 'Fortunately, as confirmed in a formal allocation letter to the Province by National Treasury, the withdrawal of the proposed VAT increase has had no impact on the Provincial Budget.' He further highlighted that, 'There has been absolutely no change to the fiscal framework in the Province of KwaZulu-Natal because of the withdrawal of VAT. Our budget remains a total of R158.4 billion.'
The Citizen
20-05-2025
- Business
- The Citizen
Calls for bigger slices of Godongwana's budget cake
Struggling entities are asking for bigger slices of the national budget after their funds depleted in the past financial year. Finance Minister Enoch Godongwana's budget 3.0 has many, including constrained provincial administrations and traditional authorities, asking for bigger slices from the yet-to-be divided national cake. With the value-added tax (VAT) issue that delayed the passing of the budget now off the table, Godongwana could be smiling as he delivers his budget speech tomorrow – four months after a hollow address in February. Political parties and rural voices weigh in Now that a consensus has been reached, with the government of national unity (GNU) parties giving budget a thumbs-up, many have come forward to claim their share, or what they think they deserve from the cake. Even the usually reticent traditional leaders have asked Godongwana not to forget them. Some provinces had been struggling to survive beyond the end of the past financial year as their budgets were exhausted. The situation worsened after Godongwana withdrew the Division of Revenue Bill and the Appropriation Bill he introduced in the National Assembly last month, due to the budget impasse within the GNU. All the provincial budgets depend on the national allocations by the minister. ALSO READ: Budget 3.0: will it be third time lucky for Godongwana? KwaZulu-Natal hangs by a thread KwaZulu-Natal, which has been hardest hit by budget depletion, had been waiting for Godongwana's allocations with bated breath after it had almost exhausted its 2024-25 financial year budgets – leaving service providers and early childhood teachers high and dry for at least two months. KZN finance MEC Francois Rogers appealed to Godongwana and National Treasury to ensure that the way forward is clearly mapped out during the coming days. 'We also call on National Treasury to ensure that there are no reductions in KZN's equitable share, or provincial conditional grants,' Rogers said. Political parties and rural voices weigh in The DA has made significant proposals dealing with comprehensive fiscal strategies. Traditional leaders also want a fair share of the budget allocations to develop their communities, whom they claimed were neglected for many years. North West-based Bakgatla ba Kgafela traditional leader, Kgosi Nyalala Pilane, was first to jump to the fore to request Godongwana to prioritise rural development. He urged Godongwana to prioritise spending that delivers real impact and avoid shortcuts that harm low-income households. Union federation Cosatu asked Godongwana not to disappoint workers and the nation. NOW READ: Budget 3.0: Provincial budgets in the firing line?
IOL News
02-05-2025
- Business
- IOL News
Impact of VAT increase suspension on local government budgets
Parliament's Settlement on VAT Hike: Implications for Municipal Budgets Image: Armand Hough / Independent Newspapers Following the scrapping of the planned 0.5% increase in Value-Added Tax (VAT), initially scheduled to come into effect on May 1, 2025, several previously approved municipal budgets have also been set aside, further complicating local government financial planning. This suspension means that not only is the national budget process delayed, but local government budgets—previously approved and scheduled for implementation—are also temporarily on hold, affecting service delivery and development projects at the municipal level. The ripple effects underscore the broader economic and administrative uncertainty created by the legal and political developments surrounding the VAT hike. On April 27, 2025, Parliament entered into an out-of-court settlement concerning the contentious VAT hike and the broader 2025 Fiscal Framework. The settlement, sanctioned by the Cape High Court, suspends the implementation of VAT increases and sets aside the resolutions adopted by Parliament's two Houses—the National Assembly and the National Council of Provinces—regarding the Fiscal Framework. This means that the original Appropriation Bill, which details government spending and allocates funds to various departments, has been withdrawn and is no longer before Parliament. As a result, Parliament said the scheduled budget votes—crucial steps in the legislative process, are currently on hold. It also stated that municipal budgets, already approved for the current financial year, are being set aside. What Happens Next? Parliamentary spokesperson Moloto Mothapo explained that a new Appropriation Bill and revised budget instruments must be drafted and introduced through the upcoming Budget Speech. Once these are tabled, the legislative Houses must reschedule their review and approval processes. 'A new Appropriation Bill and revised budget instruments will need to be introduced, after which the budget votes will be scheduled afresh by the legislative framework and parliamentary procedures,' Mothapo stated. He emphasised that the National Assembly and the National Council of Provinces must review and restructure their programs accordingly. The respective Programme Committees will set new timelines to ensure that all legislative steps are completed efficiently and that the budget is passed within the legally prescribed timeframes, in line with the Money Bills and Related Matters Act, 2009.
IOL News
30-04-2025
- Business
- IOL News
South Africa's Budget Speech Set for 21 May: Key Insights from Finance Minister Godongwana
Finance Minister Enoch Godongwana announced on Wednesday in a media briefing that the third Budget speech will take place on 21 May. Image: Picture supplied Finance Minister Enoch Godongwana announced on Wednesday in a media briefing that the third Budget speech will take place on 21 May. The announcement comes following the 0.5 VAT reversal announced last week by the Treasury, which was proposed in the March 2025 Budget and the matter being taken to court by the Democratic Alliance (DA) and Economic Freedom Fighters (EFF). Minister Godongwana also announced that he and the Treasury would not be taking any questions regarding the preparation of the third budget speech until 21 May. Godongwana said that the Budget of 12 March 2025 and the proposed VAT increase sparked rigorous debate. 'This is welcomed in a healthy democracy. Today there is clarity that VAT will remain at 15%. This decision was shaped not only by political debate but by the voices of the South African people.' Godongwana added that we are all new in South Africa to what is called coalition politics. 'There are lessons to be learnt by cabinet, legislature and ourselves. I'm pleased that we have agreed that we will balance the budget without raising VAT while protecting vital sectors such as education, health, and social grants.' Godongwana said that the National Treasury has already commenced work on developing a new fiscal framework that will maintain their trajectory toward debt stabilisation, a crucial element in strengthening our public finances. 'The revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act. This includes formal consultations with the Financial and Fiscal Commission, thorough consultations with all political parties within the Government of National Unity (GNU), as well as Cabinet approval before presentation to Parliament.' Godongwana added that this comprehensive review will include the Fiscal Framework, the Appropriation Bill, Division of Revenue Bill, and the already tabled Rates and Monetary Amounts and Amendment of Revenue Laws Bill. 'Until the new budget is passed, government services will continue to be funded under section 29 of the Public Finance Management Act. This allows spending of up to 45 per cent of last year's budget during the first four months, and up to 10 per cent for each month after that.' Godongwana said that while we wait for the 2025 Division of Revenue Act to be passed, funding for provinces and municipalities will continue under the 2024 Act, allowing transfers of up to 45 per cent of their allocated funds. 'While the postponement of the budget's passage is not ideal, the circumstances leading to this decision have highlighted the importance of meaningful engagement on fiscal matters.' Godongwana added that this situation has provided a valuable opportunity for all stakeholders—citizens, Members of Parliament, labour organisations, and civil society—to thoroughly engage with the complex challenge of achieving fiscal sustainability while promoting economic growth and protecting essential public services within very limited resources. Godongwana said that the revised process includes: 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 added that they will soon develop a new consultation process for the Budget speech to accommodate the GNU. 'This process will start in September before the Medium-Term Budget Policy Statement (MTBPS). The MTBS is a key milestone as it shapes the content of the February budget.' Professor Andre Thomashausen, a renowned expert in international law from the University of South Africa, said that the survival of the GNU is crucial to safeguarding South Africa's reputation as a reliable trading partner and safe investment destination. 'The VAT compromise is a small price to pay for giving the GNU a longer chance to fix the many governance issues that the GNU inherited. It is positive that the VAT debate has now encouraged a more rigorous engagement to combat corruption and the wasting of funds in the upkeep of mismanaged State Owned Enterprises.' Johann Els, Old Mutual Group chief economist, said that the cancellation of the VAT rate increase has created a R75 billion funding gap over the next three years, putting pressure on the Treasury to maintain its fiscal consolidation targets. 'These include narrowing the budget deficit from -5.0% to -4.6%, raising the primary surplus from +0.5% to +0.9%, and peaking the debt-to-GDP ratio at 76.2% this year.'
Eyewitness News
30-04-2025
- Business
- Eyewitness News
Parliament looks to table new budget by 23 July 2025
CAPE TOWN/JOHANNESBURG - Unforeseen delays notwithstanding, Parliament says it's looking at passing the new budget Finance Minister Enoch Godongwana is expected to table next month by the 23rd of July. Following Godongwana's announcement on Wednesday that he will attempt for a third time to table a national budget on the 21st of May, the Speaker convened a meeting this afternoon to revise the parliamentary programme accordingly. It will involve shifting the traditional four-week mid-year recess to August. Parliament is proposing that the fiscal framework be put to the crucial vote on 11 June, within the prescribed 16-day deadline for agreeing to the budget blueprint. ALSO READ: South Africans shaped VAT reversal: 'When people speak, we must listen' - Godongwana The last vote on 2 April destabilised the Government of National Unity (GNU) when the African National Congress (ANC) had to rely on parties outside of the coalition to get it over the line, prompting a court case over process and a proposed value-added tax increase. In a revised programme, parliament has scheduled the debate on the division of revenue bill, which apportions money to the provinces and municipalities for 26 June, within 35 days from the budget tabling. The Appropriation Bill, which allocates money to the departments, will be the final bill to be voted on a month later. National Assembly Speaker Thoko Didiza has dismissed claims from the eff that the process is being rushed. "It's not about steamrolling, but it's about the processes that must be followed in accordance with the legislation." The Economic Freedom Fighters (EFF) says it will be keeping a close watch to ensure there's adequate in-person, public participation. Meanwhile, the past two months have divided the GNU, with some claiming Godongwana failed to consult them before his first budget in February. The African National Congress (ANC) held a media briefing in Johannesburg on Wednesday, reflecting on the two-month-long stalemate on the national budget. The ANC is hopeful that the budget deadlock has been put to bed, as Godongwana prepares to present another budget in May. ANC secretary-general Fikile Mbalula says the GNU will discuss the contents of Godongwana's upcoming budget to prevent similar disputes this time around. Mbalula acknowledges that since the ANC no longer holds a majority, GNU partners will have to be included in decision-making processes. "The other lesson for us is that we are in uncharted waters. It's correct that the budget would have been presented and passed by now. In this particular instance, it means we must engage political parties because the budget is an important political tool." Mbalula is confident that the budget will be passed in Parliament without unnecessary disagreements.
