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Eyewitness News
an hour ago
- Business
- Eyewitness News
Parliament's finance committee approves fiscal framework, revenue proposals underpinning budget
CAPE TOWN - Parliament's standing committee on finance has approved the fiscal framework and revenue proposals that underpin the 2025 budget, setting the scene for the less contentious adoption of its report in the National Assembly than was the case in March. Following two days of deliberations, the African National Congress (ANC), Democratic Alliance (DA) and ActionSA voted in favour of the report. However, the uMkhonto weSizwe (MK) Party and Economic Freedom Fighters (EFF) dug in their heels saying the fuel levy is an unnecessary inclusion that will impact the poor. Wednesday's joint meeting of the finance committees of both houses was far less tense than when it considered an earlier version of the budget framework, which contained a value-added tax (VAT) increase that split the Government of National Unity (GNU). ALSO READ: Main opposition parties reject Treasury's assertion of pro-poor budget However, opposition parties took issue with the increase in the fuel levy, which was included in this third version of the budget tabled by the finance minister two weeks ago. The MK Party's Brian Molefe said other means could have been found to raise R4 billion in a R2 trillion budget. "The fuel levy is regressive and it is not pro-growth, because the fuel levy dampens consumption, expenditure, and it is inflationary as well." After losing Tuesday's court case on the matter, the EFF's Omphile Maotwe made one last appeal for the committee to retract the increase. "If we can stand up and say we reject the fuel levy, that's something we can give the people of South Africa." But with no support to force the finance minister's hand again, both opposition parties rejected the fiscal framework and the committee's report, which will be put to a house vote next Wednesday.
IOL News
3 days ago
- Business
- IOL News
EFF rejects fuel levy as an attack on the poor
EFF treasurer-general Omphile Maotwe has written to Finance Minister Enoch Godogwana rejecting the fuel levy. Image: Nhlanhla Phillips / Independent Newspapers By: Omphile Maotwe On 21 May 2025, the Minister of Finance tabled the third version of the 2025/26 national budget. Instead of solutions to South Africa's deepening fiscal and social crisis, the Minister delivered a cold and calculated betrayal. He proposed an increase to the general fuel levy by 16 cents per litre for petrol and 15 cents for diesel. True to what the Economic Freedom Fighters (EFF) and the country has come to expect from the GNU led administration, the proposal was dishonestly framed as a 'regulatory adjustment' instead of a tax increase. This levy aims to recover R1.3 billion in revenue after the courts struck down the unlawful VAT increase that featured in the initial budget proposal. The EFF is clear that the fuel levy is not a regulatory tweak but rather a tax hike that is being unlawfully imposed through the Customs and Excise Act, instead of through the Money Bill Act, as mandated by section 77 of the Constitution. We reject this proposal precisely because it is illegal and anti-poor. Our Constitution empowers only parliament to impose a national tax through the money bill. The Minister should therefore not be using administrative regulation to introduce a tax increase. The levy is a tax, even the government's own Budget Review refers to this fuel levy increase as part of 'fuel taxes on petrol and diesel.' Proceeding with it in this manner will only serve to defy the constitution, undermine Parliament's authority, and rob South Africans of their right to participate in fiscal decisions that directly affect their lives. The judiciary was clear in its handling of the initially proposed VAT increase by the Minister. A 2% VAT increase was proposed which was brought down to 0.5% but ultimately through the work of the EFF, it was recognised as a tax measure implemented outside of the law by the judiciary and subsequently suspended. Yet here we are again with a Minister who is determined to continue to undermine parliament and the courts. As the EFF we recognise this as arrogance, contempt and a blatant disregard of the law. The economic consequences of this illegal fuel levy will be devastating. While R1.3 billion may seem insignificant to Treasury, its impact on the working class and ordinary people of this country will be economically challenging. Fuel costs are a direct driver of inflation in transport, food, and essential services. For a worker commuting daily, a student relying on taxis, or a small trader transporting goods, this increase is not abstract. It is an attack on their survival. Our country is facing an economic crisis. That much is clear but as the EFF we will always be the voice that shields the poor from carrying an economic burden that results from poor governance and mismanagement. The crisis was not created by our unemployed youth in Tembisa or the grandmother in Giyani. It was not created by the street vendor in Umlazi or the taxi driver in Mthatha. The crisis was created by the ANC government through corruption, mismanagement, and a neoliberal austerity agenda that punishes the poor and protects the rich. The EFF has taken decisive action regarding the fuel levy and on 26 May 2025, we wrote to the Speaker of the National Assembly and the Chairperson of the Standing Committee on Finance, demanding immediate parliamentary intervention. We called for the Minister of Finance to withdraw the proposed levy because it must be introduced through the Money Bill Act. We further urged the Finance Committee to place this matter on its agenda, summon the Minister to account, and reaffirm Parliament's constitutional authority over all revenue measures. This matter deserves urgent attention because if the levy is allowed to proceed in its illegal state, we run the risk of further legal challenges and collapsing the fiscal framework. No legitimate parliament would endorse a budget that is tainted by unlawful taxation. What is most alarming is that if the 2025/26 Budget is not adopted by 31 July as required by the Constitution, the government could face an administrative shutdown under section 21. The EFF however is not opposed to raising revenue legitimately. We support progressive taxation that will fund development, create much-needed jobs, and render services to our people. But taxation must be lawful, fair, and aimed at those with the most. The government needs to urgently impose a wealth tax, close corporate tax loopholes, and end illicit financial flows. Revenue can also be raised by scrapping the bailouts to failing state-owned entities but the EFF is against putting further strain on the poor and working class. Imposing a fuel levy is a political decision and must be recognised as such. The EFF will not be silenced or intimidated by political bullies who continue to disregard the law, due process and undermine parliament and our constitution. We stand ready to fight against the injustices that will emanate from this tax increase that is disguised as an adjustment. We will fight against it in the corridors of parliament, in the confines of the courtrooms, and ultimately on the streets and on the picket lines. We will challenge this decision because we recognise it for exactly what it is, a bid to squeeze the poor and continue to cushion the rich and politically connected. Parliament should not allow the fuel levy to proceed as it threatens to render our institutions irrelevant. The people of South Africa did not vote for a government that will govern without notice, and parliament should be at the forefront of protecting the people who have entrusted us to lead and represent them. We call on all progressive forces to demand accountability, consultation, and for parliament to reclaim its power. The time has come for parliament to decide if it will stand with the people of South Africa or bow down to an unaccountable executive. The EFF stands with the people. * Omphile Maotwe is the Treasurer General of the Economic Freedom Fighters and a Member of Parliament ** The views expressed do not necessarily reflect the views of IOL or Independent Media
IOL News
28-05-2025
- Business
- IOL News
EFF threatens court action over proposed fuel levy increase
EFF treasurer-general Omphile Maotwe has written to Finance Minister Enoch Godogwana rejecting the fuel levy. Image: Nhlanhla Phillips / Independent Newspapers The EFF has written to Finance Minister Enoch Godongwana, with an ultimatum, demanding the withdrawal of the proposed fuel levy increase, citing constitutional and legislative obligations or face more court action. The party argues that the increase, effective June 4, 2025, is a regressive tax that will disproportionately affect the working class and poor. Godongwana was given 48 hours to respond to the Red Berets' demands, or risk further escalation of the Budget crisis. Godongwana's spokesperson, Mfuneko Toyana, declined to comment on the matter; however, confirmed that the department had received the letter. 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 ✕ The Budget is, however, yet to be passed in the National Assembly. The EFF's letter comes amid the ongoing drama surrounding the 2025 Budget. The party, with the help of the Government of National Unity (GNU) aligned DA, had previously successfully challenged the Value-Added Tax (VAT) increase in court, which was declared invalid and withdrawn. However, the National Treasury has now proposed to increase the general fuel levy by 16 cents per litre on petrol and 15 cents per litre on diesel, as outlined in the May 2025 Budget Review. In a lengthy letter penned by party treasurer-general, Omphile Maotwe, the EFF argues that the fuel levy increase will have a devastating impact on the working class and poor, exacerbating the cost-of-living crisis and placing undue pressure on households already struggling with rising food and transport prices, stagnating incomes, and unemployment. "The proposed fuel levy increases, though seemingly modest in nominal terms, will have disproportionate effects on the working class and poor, as they cascade through transport, food, and essential goods pricing," Maotwe wrote. The EFF also argues that the fuel levy increase is unconstitutional, as it seeks to impose a national tax through executive regulation rather than through a legislative process governed by the Constitution and relevant statutes. "The fuel levy is a national tax, paid by every South African, directly or indirectly. It cannot be increased through a Government Gazette notice or regulation," the party said. The EFF has formally requested that the minister withdraw the proposed increase. The party has also demanded that the minister refrain from issuing any Gazette or regulatory notice under the Customs and Excise Act until this tax measure has been lawfully processed via a Money Bill.
News24
07-05-2025
- Business
- News24
Financial watchdog to probe SA bank charges
The FSCA has observed several variations in the pricing approaches of SA banks. In some cases, there are significant disparities in fees for the same or similar services. Bank charges have been a contentious issue for decades, with fees often obscured so that comparisons are difficult. For more financial news, go to the News24 Business homepage. The Financial Sector Conduct Authority (FSCA) has initiated a dedicated project to investigate fees charged by SA banks in order to determine whether further action is needed. That's according to Finance Minister Enoch Godongwana, who made the revelation in a written reply to a parliamentary question by EFF MP Omphile Maotwe, who had asked whether National Treasury was investigating 'exorbitant' bank charges. Maotwe also wanted to know whether National Treasury had a policy to address expensive bank charges. 'The FSCA has observed several variations in the pricing approaches and structures between different banks. In some cases, there are significant disparities in fees between banks for the same, or relatively similar, products or services,' Godongwana said in a written response dated 14 February this year. 'Additionally, concerns have been identified about the lack of adequate disclosure by some banks, and poor understanding by customers, of these fees.' Godongwana further elaborated that as the relevant authority responsible for supervising the market conduct of banks, the FSCA had published a conduct standard for lenders in 2020, which became effective in July 2021. The Conduct Standard requires banks to conduct business in a manner that prioritises the fair treatment of customers. '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,' Godongwana said. '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 to financial customers. ' Bank charges have been a contentious issue in SA, with issues of often hidden and obscure charges making it difficult for consumers to choose between different financial service providers. At the time of publication, the FSCA had not yet responded to questions from News24 seeking more information on the scope of its reported investigation into bank charges.
Russia Today
23-04-2025
- Business
- Russia Today
South African MP proposes ‘Apartheid tax' to shield poor from VAT hike
EFF Treasurer-General Omphile Maotwe has urged the government to introduce an 'apartheid tax' on inherited apartheid-era wealth instead of raising Value Added-Tax (VAT). Speaking to journalists outside the Western Cape High Court on Tuesday—during the first hearing challenging the legality of the planned VAT hike—Maotwe argued that such a tax reform would not only generate significantly more revenue than the R28 billion shortfall the government seeks to address. She said this would also ease growing tensions within the Government of National Unity (GNU) over fiscal policy. She further criticised Finance Minister Enoch Godongwana for lacking the political will to impose taxes on the wealthy, suggesting that the Minister was 'afraid to approach the rich,' and instead opted for a VAT increase that disproportionately impacts the poor. 'That will give you far more money than the R 28 bn they're looking for. But the easy target is often the poor. We can't afford to put bread on the table. Imagine with the impact of the VAT increase. 'Our people will die from poverty. The triple oppression of poverty, inequality and unemployment is going to get worse,' she said. The EFF and the DA requested the court to halt tax hikes, arguing that it will cripple the public's pockets. The court is yet to rule. The hike is expected to come in on May 1. In his defence, Finance Minister Godongwana emphasised the necessity of the VAT hike to sustain critical public services, including healthcare, education, transportation, and public safety. Legal submissions from the Treasury argued that the VAT increase is the most viable and sustainable option given current fiscal constraints, limited borrowing capacity, and the risks associated with further budget cuts. In contrast, Maotwe has advocated for a more progressive taxation approach. She has called on the government to shift the fiscal burden onto high-net-worth individuals by introducing a wealth tax and closing loopholes that allow trusts and luxury properties to evade fair taxation. 'We are telling him he doesn't need to increase VAT. He needs to tax the rich. Introduce a wealth tax. Many trusts hold luxury properties which are not being taxed, but they use the portfolios to apply for loans at the banks,' she said. She also proposed an increase in the corporate tax rate from the current 27% to 29%, citing strong profit margins in the private published by IOL
