Latest news with #EnochGodongwana
Eyewitness News
8 hours ago
- Business
- Eyewitness News
Treasury stands firm on unaffordability of continued extension of SRD grant
CAPE TOWN - Treasury is standing firm on the unaffordability of the continued extension of the social relief of distress (SRD) grant introduced during the COVID-19 pandemic. It has budgeted R35.2 billion to pay the grant in this financial year, while also appealing a high court ruling that it relaxes its criteria for eligibility to include thousands more people. Delivering the second version of the budget in March, Finance Minister Enoch Godongwana announced that the grant would be extended for yet another year. That is unchanged in the current version of the budget. ALSO READ: • SARS expects to see impact of increase in tax collection efforts from Q2 • Expanding list of tax-free food items won't benefit poorer households: Treasury • Treasury defends fuel levy increase However, responding to public submissions on the budget in Parliament on Friday, Treasury's head of public finance, Rendani Randela, said that Treasury has no choice but to appeal January's high court ruling that it include thousands more to receive the monthly R370 stipend. "That judgment is a fiscal risk on its own. And again, we are looking at the bigger picture here. Social assistance is not the only programme that we have, we also have other social assistance programmes outside the Department of Social Development." With 61% of the national budget going towards the social wage, Randela said Treasury believes that the existing social support net covers many of those also eligible for the SRD grant and double-dipping has to be avoided. Government is yet to take a decision on persistent calls from civil society for the SRD grant to become a basic income grant. "There's no way that we can't have a mechanism to filter out undeserving recipients of these social assistance programmes. That's why we are appealing that judgment because the way it is, if we don't challenge it, it is unaffordable."
Eyewitness News
a day ago
- Business
- Eyewitness News
Expanding list of tax-free food items won't benefit poorer households: Treasury
CAPE TOWN - The Treasury doesn't believe that expanding the basket of tax-free food items will have the desired effect of lowering living costs for poorer households. It said that past experience has shown it would benefit retailers instead. Along with retracting a proposed value-added tax (VAT) increase in the third version of this year's national budget, Finance Minister Enoch Godongwana announced last week that the Treasury would also no longer be adding more items to the essential list of 21. During public hearings on the budget this week, the South African Poultry Association and dairy manufacturer, Clover SA, appealed to Parliament for chicken and dairy liquid blends to be zero-rated to ward off malnutrition, and to offset the impact of the impending fuel levy increase next week. ALSO READ: But Treasury's taxation head, Chris Axelson, said on Friday that zero-rating was viewed as a "blunt instrument". He said that when the basket was last expanded in 2019, retailers only dropped prices between seven and eight percent and not by the standard VAT rate of 15%. "So the R5 billion that government is losing, about half of that is going to lower-income households, and the benefit of lower prices, and the other half is going either to retailers or the distributors." Axelson said that Treasury believes the current list of zero-rated items was well-targeted to spare poorer households. "If there is no VAT rate increase, we don't believe it is the best course of action to continue with that zero-rating." Axelson pointed out that agricultural producers stood to gain from a diesel rebate to mitigate against increased food prices as a result of the fuel levy hike.
The Citizen
2 days ago
- Business
- The Citizen
EFF files urgent interdict to stop proposed fuel levy hike
In his budget speech, Finance Minister Enoch Godongwana announced the fuel levy would take effect on 4 June. Finance Minister Enoch Godongwana is facing another legal challenge after the EFF filed court papers in a bid to halt a proposed increase in fuel levies. This is the latest twist in a months-long tussle over the budget after the value-added tax (VAT) debacle. Fuel levy In his budget speech last week, Godongwana announced a fuel levy increase of 16c for petrol and 15c for diesel, which would take effect on June 4. Godongwana stated that the levy increase was the only new tax proposal in the third version of his budget. He, however, did note that this alone will not close the fiscal gap over the medium term. The levies are part of the government's revenue generation for 2025-26, following the withdrawal of the 0.5 percentage point increase in VAT in April. ALSO READ: Treasury reverses proposed VAT hike, will remain at 15% Legal challenge In papers filed in the Western Cape High Court, the EFF stated that it wrote to Godongwana, arguing that raising the fuel levy would harm the poorest South Africans and undermine economic growth. 'We took this action after repeated efforts to caution the minister and appeal to his conscience failed. We wrote to the Minister, urging him to consider the impact of this increase on the poor and working-class people of South Africa, especially during a time when the cost-of-living crisis is deepening. 'We also reminded him that, just like the VAT increase, raising the fuel levy without introducing a proper Money Bill is unlawful and undermines parliamentary oversight,' the EFF said. Letters to parliament The EFF said it has also written to the Speaker of the National Assembly, Thoko Didiza, and the Chairperson of the Standing Committee on Finance, Dr Joseph Maswanganyi, about the fuel levy hike. 'We warned them that if parliament proceeds to adopt the 2025 Fiscal Framework and Revenue Proposals that include this illegal fuel levy increase, the entire budget process will be placed in jeopardy, the party said. 'Allowing such an increase without a Money Bill risks the entire national budget being declared invalid by the courts, potentially long after funds have already been spent. 'This would severely damage the constitutional standing of parliament, undermine financial accountability, and cause serious consequences for service delivery and public confidence in government,' the EFF said. What is the fuel levy? The EFF has warned that failure to comply with these demands may result in further legal action. The fuel levy is a tax charged on every litre of fuel sold, with a portion going to the government and another to the Road Accident Fund (RAF levy) to compensate victims of motor vehicle accidents. It amounts to 18% of the retail price, while the RAF levy is about 10%. This has remained unchanged since 2022 to mitigate the effects of higher inflation resulting from increased fuel prices. ALSO READ: EFF calls for 'apartheid tax' counter instead of VAT hike [VIDEO]
TimesLIVE
2 days ago
- Business
- TimesLIVE
EFF takes fuel levy increase to court after budget 3.0
The EFF has launched a court challenge to the fuel levy increase introduced by the budget 3.0. In his third attempt at tabling the budget, finance minister Enoch Godongwana increased the fuel levy by 16 c/l and 15 c/l on petrol and diesel respectively. The levy is expected to kick in on June 4. The increase was seen by many as a replacement for the VAT hike that was rejected. However, experts have argued the fuel levy increase was meant to cover the more than R5bn intended for the Road Accident Fund which they say has not been receiving funding in the past three years. The EFF on Thursday said it was interdicting the fuel levy increase after attempts to get Godongwana to reconsider this were ineffective. 'We took this action after repeated efforts to caution the minister and appeals to his conscience failed. We wrote to the minister, urging him to consider the effect of this increase on the poor and working-class people, especially as the cost-of-living crisis is deepening,' the EFF said. 'We also reminded him that, like the VAT increase, raising the fuel levy without introducing a proper money bill is unlawful and undermines parliamentary oversight.'
The South African
2 days ago
- Business
- The South African
EFF takes legal action to block fuel levy hike
The Economic Freedom Fighters (EFF) have filed an urgent application in the Western Cape High Court. They want to stop Finance Minister Enoch Godongwana from implementing the fuel levy increase announced in the 2025 Budget Speech. The government plans to raise the fuel levy by 16 cents per litre for petrol and 15 cents for diesel, effective from June 2025. The party claims it repeatedly cautioned the Minister and appealed to his conscience. It warned him of the impact such a move would have on poor and working-class South Africans amid a deepening cost-of-living crisis. The party insists that the government should follow proper constitutional and legislative processes for the fuel levy hike. It compares this to how Parliament previously rejected the VAT increase. The EFF warned that skipping Parliament weakens democracy and could lead to more bad decisions in future. The EFF warns that implementing the levy without a Money Bill could lead the courts to declare the national budget invalid even after the funds have been spent. The party says such a ruling would jeopardise the country's fiscal credibility, disrupt service delivery and damage public confidence in government institutions. They stress that the issue is not only legal but economic, as the fuel levy directly affects transport, food, and other basic goods. The EFF says the increase will hit the poorest households hardest. It insists it will not stand by while technocrats override democratic processes. The EFF has written to the Speaker of the National Assembly and the Chairperson of the Standing Committee on Finance. It warned them not to proceed with adopting the 2025 Fiscal Framework if it includes the fuel levy hike. They urge Parliament to act responsibly and call on the Minister to withdraw what they describe as a reckless decision. 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.
