Latest news with #FiscalFrameworkandRevenueProposals
The Citizen
5 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]
IOL News
19-05-2025
- Business
- IOL News
EFF leads ‘VAT Victory' march to national treasury
Julius Malema's EFF will lead what it calls a 'VAT Victory' march to the National Treasury on Monday to celebrate the scrapping of the controversial VAT increase ahead to the tabling of the third national budget The EFF will lead what it calls a 'VAT Victory' march to the National Treasury in Pretoria on Monday morning, celebrating what the party deems a major triumph for the people of South Africa. The demonstration follows the Western Cape High Court's decision to suspend the proposed VAT increase and set aside the 2025 Fiscal Framework and Revenue Proposals. The court ruled that the adoption of the framework by the Standing Committee on Finance and the National Assembly was unlawful — a legal challenge spearheaded by the EFF and supported by the Democratic Alliance. The EFF credited its efforts in Parliament and the courts for blocking the proposed half-percentage point increase in VAT, a move it argues would have disproportionately affected the country's poor and working-class citizens. The march will begin at the Union Buildings and proceed to the National Treasury, just two days before Finance Minister Enoch Godongwana is scheduled to table his third national budget of the year in Cape Town. Road closures are expected along Stanza Bopape, Madiba, Paul Kruger, and Lilian Ngoyi streets. Meanwhile, Finance Minister Enoch Godongwana, will deliver the national budget. This will be third time that he will deliver the budget this year. [email protected] IOL Politics
IOL News
29-04-2025
- Business
- IOL News
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
IOL News
29-04-2025
- Business
- IOL News
What vendors and consumers need to know about SARS' VAT rate reversal
SARS Commissioner Edward Kieswetter welcomes the R7.5 billion Finance Minister Enoch Godongwana allocated to SARS in the 2025 Budget. Image: GCIS The South African Revenue Service (SARS) has issued a warning to vendors and consumers about the implications of the reversal of the planned 0.5% VAT rate increase. SARS Commissioner Edward Kieswetter noted that the decision by Finance Minister Enoch Godongwana to reverse the VAT increase, initially set to take effect on May 1, 2025, has significant practical implications for VAT vendors and consumers. The warning comes after the Western Cape High Court's full bench set aside the adopted 2025 Fiscal Framework and Revenue Proposals and suspended the implementation of the VAT increase from 15% to 15.5% recently. The EFF and the DA had approached the court to have the VAT increase announcement by Godongwana as well as the adoption of the finance committees' report by both Houses set aside. Kieswetter said SARS will ensure the necessary adjustments are made to accommodate the change. "As the administrator of all national government tax measures, SARS will ensure that the necessary adjustments are made to accommodate this change," Kieswetter said. Vendors that have not implemented the change in rate are expected to charge VAT at the rate of 15% and not 15.5% for relevant goods and services. Vendors that have already implemented the rate change may need to adjust their systems accordingly and report and pay the VAT. If a vendor is unable to revert to the 15% rate due to complex system changes, they must report and account for supplies and purchases at the 15.5% rate until they can make the necessary system adjustments. According to the commissioner, the VAT transactions that were charged at 15.5% must be reported in field 12 (for output tax) and field 18 (for input tax) of the VAT return. Adjustments in the form of refunds of the 0.5% rate to customers and from suppliers must equally be reported in fields 12 and 18, respectively. The VAT return declarations made will be taken into consideration when verifications and/or audits on the affected VAT tax periods are conducted. 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 Next Stay Close ✕
eNCA
29-04-2025
- Business
- eNCA
Date for new budget speech to be set
CAPE TOWN - Parliament is collaborating with the Executive as a date for a new Budget Speech will have to be set. The Western Cape High Court has revoked the adoption of the Fiscal Framework and Revenue Proposals report by Parliament. The framework sets out government's macroeconomic policy position, revenue projections, and overall spending ceiling for the financial year.
