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TimesLIVE
6 days ago
- Business
- TimesLIVE
Third time lucky as committees approve report on budget 3.0
It took three drafts, two tablings, a court challenge and some last-minute bladder pressure. Still, parliament's standing and select committees on finance approved their report on finance minister Enoch Godongwana's 2025 budget. MPs from the committees met in a joint sitting on Wednesday to consider and approve the report, which noted Godongwana's proposal to raise the general fuel levy for petrol and diesel to R4.01 a litre and R3.85 a litre respectively. This comes after the Western Cape High Court dismissed the urgency of a legal challenge to the proposed fuel levy hike by the EFF. The department of petroleum and mineral resources also announced that the fuel price would drop in June by 19c, and diesel by 50c a litre. Put to the vote, six MPs, including standing committee on finance chair Joe Maswanganyi, voted to adopt the report. Three MPs voted against — EFF MP Omphile Maotwe, MK Party MP Brian Molefe and MK Party MP Des van Rooyen. Maotwe fought until the very end of the draft report's reading and consideration to stress that her party rejected the fuel levy hike proposal. Van Rooyen concurred with Maotwe, saying the increase went beyond R4.1bn as a regressive tax proposal that will make millions of South Africans poorer. 'If you look at what is going to be affected by the fuel levy increase, it's fuel and transportation, and the poorest people will feel it the hardest because they consume these at high levels.' Molefe said the prospective revenue from the hike was not enough to justify subjecting poor South Africans to what he called a disproportionate cost burden. 'We need to at least capture those sentiments about the fuel levy, and for those reasons we do not support it. But more importantly, this budget is R2-trillion. Why do you take R1.4-trillion to harden the budget of the poor with a burden of R4bn, which is absolutely unnecessary?' The first 2025 budget was drafted in February but was never tabled due to resistance to Godongwana's proposal to raise VAT. The second version of the budget, tabled in March, reduced the VAT hike, but the adoption of that budget was challenged in court, and the hike was scrapped. In a humorous moment, before the adoption of the report went to a vote, Action SA MP Alan Beasley raised his hand to request a comfort break so he could use the bathroom. As inevitable as the outcome may have seemed, the moment was a welcome moment of relief from the tension.
The Citizen
27-05-2025
- Business
- The Citizen
Ramaphosa defends US trip amid economic criticism during Q&A
Ramaphosa defends his US trip amid questions over slow economic growth, rising costs, and unemployment. President Cyril Ramaphosa at the Nieuwmeester Dome in Cape Town on 13 February 2025. Picture: Gallo Images/Jeffrey Abrahams President Cyril Ramaphosa faced tough questions in the National Assembly, including criticism of his United States (US) trip, his government's failure to curb the rising cost of living, slow economic growth and the high unemployment rate in South Africa. Ramaphosa responded to questions from members of the National Assembly on Tuesday, with economic growth and the cost of living among the issues for deliberation. EFF criticised govt for lack of projected economic growth While asking the president the question, EFF Treasurer-General Omphile Maotwe criticised the government for not achieving the projected economic growth. Maotwe highlighted Ramaphosa's failure to reduce high unemployment levels and protect the poor from rising cost of living. 'We saw you taking a trip to the US last week, and we are asking ourselves what economic strategy and economic interventions you are trying to lock in,' she asked. Maotwe's allocated time, however, expired, leading to a debate in the chamber between Deputy Speaker Dr Annelie Lotriet and the EFF regarding the rules and procedures. This ultimately resulted in Maotwe's removal. ALSO READ: WATCH: 'Dim the lights' — Ramaphosa pokes fun at Trump meeting Ramaphosa eventually addressed the question, stating that the primary aim of his trip was to restore the deteriorating relationship between South Africa and the US. He emphasised the significance of both countries in each other's economies and their political relations. The president said the visit aimed to reset the relationship, as the adverse impact on South Africa's economy was significant, particularly for the agricultural, automotive, steel, aluminium, and mining sectors. Ramaphosa defends US trip objectives Ramaphosa added that the second objective was to establish a process of engagement between the US and South Africa on issues such as tariffs, investments and related matters. He said the third objective was to discuss the G20 and the importance of the United States' engagement with the G20. 'We believe that we achieved those objectives,' Ramaphosa said. He added that the trip successfully reset the two countries' relationship, despite media portrayals. ALSO READ: President Ramaphosa to answer these six questions in parliament on Tuesday The president said a meaningful discussion and lunch were held in a quiet room with President Donald Trump and his representatives. Ramaphosa added that engagements will continue through the G20 process. Watch President Ramaphosa respond to questions in parliament here: 'We do believe that the US continues to play such a big role in the life of our economy. It was necessary and important for us to go and engage with them because many of our people's jobs are dependent on our economic dealings with the US,' Ramaphosa said. Regarding shielding South Africans from the high cost of living, the president acknowledged the issue of high living costs in South Africa and emphasised the government's concern. Govt concerned about cost of living – president The president said macroeconomic policies, including an inflation target, have helped keep prices low and stable, reducing average prices. He added that the government has increased social grants and provides free basic services, including water and electricity. Ramaphosa urged municipalities to ensure these services reach those in need effectively. ALSO READ: Trump changes tune and 'agrees' to participate in G20 Summit, Ramaphosa says 'It is therefore essential that municipalities ensure that this support reaches all the households that need it. I keep on urging municipalities to revamp their indigent registers,' he said. The president stated that many municipalities, including Johannesburg, have not been updating their indigent registers, resulting in the misuse of allocations. He also discussed ongoing efforts to address structural factors, including the impact of apartheid spatial planning and reforming housing policies to provide affordable housing closer to economic centres. EFF complain about being removed Amid the president's answering of questions, numerous EFF members, including EFF leader Julius Malema, were removed from the chamber or the virtual platform for raising points of order. The EFF raised points of order on the manner in which Ramaphosa responded to questions. Lotriet highlighted the removal of members, despite them having done nothing wrong, and the presence of security personnel in parliament. 'Instead of listening to what Sihle Lonzi was about to say, the deputy speaker of parliament accused him of raising 'frivolous' points of order and ruled that he be illegally removed from the house,' the party complained on social media. ALSO READ: Ramaphosa played the long game with Trump ♦️Must Match♦️ The Deputy Speaker of the National Assembly is arrogantly removing those who attempt to hold Cyril Ramaphosa accountable to the people. The Deputy Speaker has now removed the Commander-in-Chief and President of the EFF @Julius_S_Malema for simply raising a point… — Economic Freedom Fighters (@EFFSouthAfrica) May 27, 2025 'I feel abused,' Ramaphosa said after more disruptions in parliament. The president's spokesperson, Vincent Magwenya, also joined the conversation on social media, tweeting that members of parliament demand accountability, but when the president comes to account, they interrupt proceedings.
IOL News
26-05-2025
- Business
- IOL News
Fuel levy increase amid VAT scrapping, 'robbing Peter to pay Paul'
While the National Treasury acknowledges that the fuel levy was regressive, it maintains that it was one of the options that needed to be considered and was increased in line with inflation. Image: Kopano Tlape / GCIS The National Treasury has been accused of fooling taxpayers by proposing an inflation-related increase in the fuel levy as a replacement for the now-scrapped VAT hike. During a joint meeting of parliamentary committees on finance and appropriations on Friday, where Finance Minister Enoch Godongwana and the National Treasury unpacked the 2025/26 Budget, MPs maintained that the fuel levy increase would negatively impact poor households amid questions about whose idea it was. The fuel levy was increased as one of the new tax measures aimed to raise R20 billion after the VAT hike, which was to generate R75 billion, was scrapped. EFF MP Omphile Maotwe said they rejected the fuel levy. 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 ✕ 'When we rejected VAT in March, we never said it must be replaced with a fuel levy. That is what the Treasury did, they just went to convert VAT to a fuel levy. What is more painful is that the increase of 16 cents per litre for petrol and 15 cents for diesel is only expected to generate R4 billion - you are saying that yourself," Maotwe said. She accused the National Treasury of ignoring their alternative revenue proposals, including the proposed wealth tax and apartheid tax. 'Why are you not considering taxing the rich?… Are you confirming this country is governed by the rich?' asked Maotwe. ActionSA MP Alan Beesley said it was great to see VAT was off the table. 'It is absolutely nonsensical that it has been replaced in part by a fuel levy,' Beesley said. 'I don't know whose idea it was, but it's just absolutely nonsensical. You're robbing Peter to pay Paul,' Beesley added. DA spokesperson on finance Mark Burke said they were supporting the Budget, but it included allusions to another R20 billion in random taxes next year they were vehemently opposed to. 'We are making clear now that unless we can identify the expenditure efficiencies that will avert the R20 billion situation, we will have to oppose any form of taxation. South Africans simply cannot afford more,' Burke said. MK Party MP Des van Rooyen said the million dollar question on the fuel levy was who was fooling who. 'The National Treasury under Minister Godongwana seems to be taking South Africans for a fool. We are saying this because it does not require a rocket scientist to determine that fuel levy is an indirect tax. It is very regressive because of its multiplier effect,' Van Rooyen said. He said the poor will be adversely affected when the price of fuel increases and that the National Treasury had gone for the low-hanging fruit while ignoring their alternative proposals. National Treasury's acting head of tax and financial sector policy division, Chris Axelson, said the fuel levy hasn't been adjusted since April 2021. 'The current increase is in line with expected inflation of around 4%. In our view, this isn't a replacement for the VAT increase,' he said. 'The VAT increase was anticipated to raise R75 billion over the next three years. This figure of a 4% increase in the fuel levy would increase the amount of revenue compared to the 12 March Budget of around R12 billion for the three years, so it's a much smaller amount.' Axelson said the points being made that the fuel levy was regressive, applied to everyone, and consumers will feel it, were valid. 'It's a difficult tax. We've been trying to avoid it, as you can see through the non-adjustments over the past four years, but in a scenario where such a large amount of revenue is missing from the removal of the VAT increases, it was one of the options that needed to be considered and was increased in line with inflation,' he added. Axelson confirmed that the National Treasury had received a lot of alternative revenue proposals, which were discussed at the joint meeting of the committees in March. The National Treasury previously argued against the increase in personal income tax and corporate income tax rates, as well as against introducing a wealth tax. 'At the moment, we don't think it's prudent to be raising these taxes, but we need R20 billion in the 2026 Budget, and that R20 billion we will look at these alternative revenue proposals. We are hoping to have a more consultative approach to the potential tax measures that we can use, and we will assess those and consider them,' he said. Cape Times
IOL News
24-05-2025
- Business
- IOL News
National Treasury faces backlash over fuel levy increase amid VAT hike scrapping
While the National Treasury acknowledges that the fuel levy was regressive, it maintains that it was one of the options that needed to be considered and was increased in line with inflation. Image: Kopano Tlape / GCIS The National Treasury has been accused of fooling the taxpayers by proposing an inflation-related increase in the fuel levy as a replacement for the now-scrapped VAT hike. During a joint meeting of parliamentary committees on finance and appropriations on Friday, where Finance Minister Enoch Godongwana and the National Treasury unpacked the 2025/26 Budget, MPs maintained that the fuel levy increase would negatively impact poor households amid questions about whose idea it was. The fuel levy was increased as one of the new tax measures aimed to raise R20 billion after the VAT hike, which was to generate R75 billion, was scrapped. EFF MP Omphile Maotwe said they rejected the fuel levy. 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 ✕ 'When we rejected VAT in March, we never said it must be replaced with a fuel levy. That is what the Treasury did, they just went to convert VAT to a fuel levy. What is more painful is that the increase of 16 cents per litre for petrol and 15 cents for diesel is only expected to generate R4 billion - you are saying that yourself," Maotwe said. She accused the National Treasury of ignoring their alternative revenue proposals, including the proposed wealth tax and apartheid tax. 'Why are you not considering taxing the rich?… Are you confirming this country is governed by the rich?' asked Maotwe. ActionSA MP Alan Beesley said it was great to see VAT was off the table. 'It is absolutely nonsensical that it has been replaced in part by a fuel levy,' Beesley said. 'I don't know whose idea it was, but it's just absolutely nonsensical. You're robbing Peter to pay Paul,' Beesley added. DA spokesperson on finance Mark Burke said they were supporting the Budget, but it included allusions to another R20 billion in random taxes next year they were vehemently opposed to. 'We are making clear now that unless we can identify the expenditure efficiencies that will avert the R20 billion situation, we will have to oppose any form of taxation. South Africans simply cannot afford more,' Burke said. MK Party MP Des van Rooyen said million dollar question on the fuel levy was who was fooling who. 'The National Treasury under Minister Godongwana seems to be taking South Africans for a fool. We are saying this because it does not require a rocket scientist to determine that fuel levy is an indirect tax. It is very regressive because of its multiplier effect,' Van Rooyen said. He said the poor will be adversely affected when the price of fuel increases and that the National Treasury had gone for the low-hanging fruit while ignoring their alternative proposals. National Treasury's acting head of tax and financial sector policy division, Chris Axelson, said the fuel levy hasn't been adjusted since April 2021. 'The current increase is in line with expected inflation of around 4%. In our view, this isn't a replacement for the VAT increase,' he said. 'The VAT increase was anticipated to raise R75 billion over the next three years. This figure of a 4% increase in the fuel levy would increase the amount of revenue compared to the 12 March Budget of around R12 billion for the three years, so it's a much smaller amount.' Axelson said the points being made that the fuel levy was regressive, applied to everyone, and consumers will feel it, were valid. 'It's a difficult tax. We've been trying to avoid it, as you can see through the non-adjustments over the past four years, but in a scenario where such a large amount of revenue is missing from the removal of the VAT increases, it was one of the options that needed to be considered and was increased in line with inflation,' he added. Axelson confirmed that the National Treasury had received a lot of alternative revenue proposals, which were discussed at the joint meeting of the committees in March. The National Treasury previously argued against the increase in personal income tax and corporate income tax rates, as well as against introducing a wealth tax. 'At the moment, we don't think it's prudent to be raising these taxes, but we need R20 billion in the 2026 Budget, and that R20 billion we will look at these alternative revenue proposals. We are hoping to have a more consultative approach to the potential tax measures that we can use, and we will assess those and consider them,' he said.
The Citizen
12-05-2025
- Business
- The Citizen
FSCA to investigate due to banks charging different amounts for the same product
The minister of finance answered some written questions in parliament about bank charges and nationalising the Reserve Bank. The Financial Sector Conduct Authority (FSCA) is investigating bank charges after observing several variations in the pricing approaches and structures between different banks. There is also concern about disclosure and how consumers understand these fees, says Finance Minister Enoch Godongwana. Godongwana, minister of finance, says in a written answer to Omphile Maotwe, an EFF MP, that In some cases there are significant disparities in fees between banks for the same or relatively similar products or services. Maotwe asked Godongwana, in a parliamentary question, if National Treasury is investigating exorbitant bank charges. Godongwana says the FSCA is responsible for overseeing the market conduct of banks, including whether the fees and charges banks impose are fair and transparent. ALSO READ: This is how to beat bank fees FSCA spotted several variations in bank charges at banks 'Through its ongoing supervisory activity, the FSCA observed several variations in the pricing approaches and structures of banks. Concerns were also identified about some of the banks' lack of adequate disclosure and customers' poor understanding of these fees. 'Therefore, the FSCA recently initiated a dedicated project to undertake a deeper assessment of transactional fee practices across registered banks in South Africa to determine whether further regulatory or policy interventions are needed.' Maotwe also wanted to know if Godongwana found that he and the governor of the South African Reserve Bank (Sarb) have the same policy approach on the role that the Sarb should play in terms of the transformation of the financial sector. Godongwana says in his answers that FSCA published the Conduct Standard for Banks 3 of 2020 which became effective in July 2021 as the responsible authority for supervising the market conduct of banks. The Conduct Standard was issued in terms of section 106 of the Financial Sector Regulation Act. ALSO READ: FSCA finds banks do not handle consumer complaints properly Conduct Standard for Banks requires transparency for bank charges 'The Conduct Standard introduced requirements for banks to conduct business in a manner that prioritises the fair treatment of financial customers. Section 5(1)(d) of the Conduct Standard stipulates that a bank that provides financial products or financial services must ensure that the terms, conditions and requirements in a contract between the bank and its retail financial customer, relating to a financial product or financial service, including fees and charges, are not unfair. 'Section 5(2) further stipulates that a term, condition or a requirement in a contract is unfair if it would result in an unfair outcome (financial or otherwise) to a financial customer if it was applied or relied on.' Godongwana says while the Conduct Standard does not prescribe or stipulate what would constitute an unfair or 'exorbitant' fee or charge, banks must be able to demonstrate that the basis for their fees and charges are reasonable and that these fees and charges do not result in unfair outcomes for financial customers. The FSCA will conduct the assessment of bank charges on this basis. ALSO READ: EFF-initiated Private Members Bill a set-up for ANC, says expert No plans to nationalise the Reserve Bank In another answer, to Nontando Nolutshungu, an EFF MP, Godongwana says government does not have any plans to nationalise the Sarb. 'While 100% ownership of the Sarb by the state would be in line with most countries and jurisdictions across the world, the benefit that would be derived from nationalising the Sarb must be balanced against the likely large fiscal cost that would accompany it. 'The costs would include compensation in terms of section 25 of the Constitution as well as existing bilateral investment treaties. However, the benefits of 100% ownership of the Sarb are minimal, as private shareholders are currently restricted to playing a governance role only and play no role in determining monetary, prudential, regulatory or any other policy, as policy issues are the sole responsibility of the governor and deputy governors of the Sarb who are appointed by the president.' Godongwana says it is more fundamental for the country that the Sarb ensures that it is allowed to independently pursue its constitutionally enshrined mandate of protecting the value of the currency in the interest of balanced and sustainable economic growth in the Republic and its additional objective of protecting and maintaining financial stability as envisaged in the Financial Sector Regulation Act.
