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Mail & Guardian
30-04-2025
- Business
- Mail & Guardian
Godongwana to table new budget on 21 May
Finance Minister Enoch Godongwana. (David Harrison/M&G) Finance Minister Enoch Godongwana said he would table a revised 2025 budget on 21 May to The political impasse prompted by his decision in March to hike VAT by one percentage point over two years, had flagged the pressing need for more consultative budget-making, Godongwana told a media briefing on Wednesday. 'Were any Godongwana said he believed that consultation with coalition partners should start in September, a month before the minister tables the medium-term budget policy statement and five months before the national budget in February. The 21 May budget will be the third he has prepared this year. He abandoned the first minutes before delivery in parliament in February and withdrew the second last week, a day after a high court hearing in which Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) attacked the tax proposals and the manner in which they passed through parliament as unlawful. Godongwana conceded that he had failed to anticipate the push-back his budget proposals would encounter within a 10-party governing coalition and described what ensued as messy. 'We are dealing with uncharted terrain. As you are aware we used to have a budget with a dominant party, being the ANC, and if one was preparing the budget you could be sure that you would go to parliament and the ANC would pass the budget. 'Now we are in a coalition government.' The new reality had the practical implication of needing support for the fiscal framework from a number of political parties in the cabinet and in parliament and in the end it was not forthcoming. 'I was within my constitutional parametres to table a money bill, what then happened, because of the nature of the coalition politics we could not find consensus,' Godongwana said. While readily conceding the lack of political support for his second budget, he was firmly denying the DA's courtroom argument that the VAT Act was unconstitutional and that he had exceeded his powers but said he was not pointing a finger at the ANC's coalition partners. 'I am not going to put blame on anybody, but that process on its own, because all of us are new in this thing, was messy,' he added. 'We have all learnt from it because we might have gone into this not anticipating the kind of challenges we faced.' The EFF, which is outside the coalition but joined in the DA's court challenge, called on Godongwana to resign after he announced that he would return to the drawing board to revoke it. He said does not intend to do so, noting that he served at the pleasure of the president who understood the political complexity of his government. 'If that president falls, I fall, but for as long as he wants me to work, I am going to work.' Godongwana said the treasury would, over the next three weeks, prepare a budget he hoped would pass as a 'sellable document' but he was not going to undermine the legislature by saying it would pass muster. 'We are going to work hard to produce a document which will be sellable.' At what he said would be the final media briefing before 21 May, the minister was repeatedly asked whether the budget imbroglio and the reversal of the VAT hike would shake investor confidence. He said investors would make their assessment on the basis of the fiscal framework as set out in the new budget, not the 'We are not worried. The credibility issue is not going to be the reversal of VAT,' he said. 'The credibility issue is going to arise from the final product, the final budget that is adopted, whether that budget will reflect fiscal sustainability and fiscal prudence, that is where the credibility issue will arise.' He added that international ratings agencies and investors were accustomed to 'the chaos of coalition governments' in more advanced economies. 'For them, it is not something new.'
TimesLIVE
30-04-2025
- Business
- TimesLIVE
Third time lucky? Godongwana announces new date for 2025 budget
Finance minister Enoch Godongwana says he will table the third attempt for the 2025 budget on May 21 after months of discord over his VAT hike proposal. Speaking to reporters in Pretoria on Wednesday afternoon, the minister said he sent a formal request to National Assembly speaker Thoko Didiza to allow the budget to be tabled in mid-May. "The ministry remains committed to transparent communication throughout the process and will provide further updates as they become available. We owe it to the hardworking citizens of SA to be open and transparent about how tax money is spent. The budget that will be tabled on May 21 will aim to maintain the principles," he said. Godongwana has made two attempts to table the 2025 budget. In February he planned to propose two VAT hikes for 2025 and 2026, but resistance to the proposal from parties in the government of national unity (GNU) and parliament forced the minister to delay the budget and return in March. He tabled a March budget that allowed for two 0.5 basis point VAT increases. While the second version of the budget was tabled, the DA and the EFF challenged its passage by the standing committee on finance and the VAT Act at the Western Cape High Court as unconstitutional.
TimesLIVE
30-04-2025
- Business
- TimesLIVE
Third time lucky? Godongwana announces a third date for 2025 budget
Finance minister Enoch Godongwana says he will table the third attempt for the 2025 budget on May 21 after months of discord over his VAT hike proposal. Speaking to reporters in Pretoria on Wednesday afternoon, the minister said he sent a formal request to National Assembly Speaker Thoko Didiza to allow the budget to be tabled in mid-May. "The ministry remains committed to transparent communication throughout the process and will provide further updates as they become available. We owe it to the hardworking citizens of SA to be open and transparent about how tax money is spent. The budget that will be tabled on May 21 will aim to maintain the principles." The minister has made two attempts to table the 2025 budget. In February he planned to propose two VAT hikes for 2025 and 2026, but resistance to the proposal from parties in the government of national unity (GNU) and parliament forced the minister to delay the budget and return in March. The minister tabled a March budget that allowed for two 0.5 basis point VAT increases. While the second version of the budget was tabled, the DA and the EFF challenged its passage by the standing committee on finance and the VAT Act at the Western Cape high court as unconstitutional. Godongwana said the revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act, consultations with the Financial and Fiscal Commission and all political parties within the GNU. "Until the new budget is passed, government services will continue to be funded under the Public Finance Management Act. This allows spending of up to 45% of last year's budget during the first four months, and up to 10% for each month after that." He said while National Treasury waits 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% of their allocated funds. During the briefing, Godongwana was asked if he would resign or if he expected President Cyril Ramaphosa would remove him after the chaotic wrangling around the budget. "That decision does not lie with me. It lies with the president. But I am mindful the president has been a part of the process. I don't think that is a question for me." He said if any credibility issues arise for the markets, it will not arise based on the VAT hike reversal, but on the final product tabled in parliament later this month.
The Star
29-04-2025
- Business
- The Star
Kenyan government backs budget cuts, endorses Finance Bill 2025
NAIROBI, April 29 (Xinhua) -- Kenya's Cabinet on Tuesday resolved to implement significant budget realignments in line with the government's fiscal consolidation policy aimed at reducing the budget deficit. During a Cabinet meeting held in the national capital of Nairobi and chaired by President William Ruto, cabinet secretaries were instructed to work with the National Treasury to identify and execute the necessary adjustments within their respective ministries and state departments. "These adjustments are part of broader austerity measures designed to strengthen fiscal discipline, reduce public debt vulnerabilities, and create the fiscal space necessary to deliver essential public goods and services," the presidency said in a statement issued after the meeting. According to the statement, the budget realignment aims to cap the fiscal deficit at no more than 4.5 percent of gross domestic product for the 2025/2026 financial year, down from 5.3 percent in 2023/2024 and 5.1 percent in 2024/2025, with a medium-term target of reducing the deficit to 2.7 percent. As a result, the Cabinet said the initial budget estimates of 4.3 trillion Kenyan shillings (about 33.2 billion U.S. dollars) will undergo substantial revisions before being tabled in the Parliament. The Cabinet also approved the Finance Bill 2025, which, according to the presidency, seeks to minimize the introduction of new taxes and instead improve tax administration through a new legislative framework. In June last year, Ruto was forced to withdraw the Finance Bill 2024 after widespread anti-government protests led by young demonstrators erupted across the country in opposition to a range of unpopular tax increases. On Tuesday, the presidency said key provisions of the Finance Bill 2025 include streamlining the tax refund process, closing legal loopholes that delay revenue collection, and reducing tax disputes by amending the Income Tax Act, VAT Act, Excise Duty Act, and the Tax Procedures Act. The bill also proposes critical reforms to support small businesses, including a provision allowing them to fully deduct the cost of everyday tools and equipment in the year of purchase, thereby eliminating unnecessary delays in accessing tax relief.
The Citizen
28-04-2025
- Business
- The Citizen
Godongwana to table new budget instruments after VAT hike halted
The DA will continue with Part B of its application to have the VAT act declared unconstitutional. Finance Minister Enoch Godongwana will now have to table the budget instruments from scratch. This comes after the Western Cape High Court on Sunday officially set aside the VAT reversal, just a few days after Godongwana's statement and legislation to suspend the 0.5 percentage point VAT increase. The DA and EFF approached the court to have the VAT increase announcement by Gondongwana including the adoption of the Joint Standing Committee on Finance's report by the National Assembly (NA) and the National Council of Provinces (NCOP) set aside. Alternative revenue Godongwana dropped his opposition to the case, saying in an affidavit filed on Sunday morning that he had done so after realising that he had no political support for a VAT increase. This was after he received a letter from National Assembly Speaker Thoko Didiza asking him to table alternative revenue proposals by 2 May. 'I want to make clear that the reason for doing so is due to the recent events [opposition against the hike and a letter from the Speaker] and not as a concession of alleged unconstitutionality,' Gondongwana wrote in his affidavit. ALSO READ: Western Cape High Court orders scrapping of the 0.5% VAT increase 'Victory for South Africans' DA Federal Chairperson said the court's decision is a victory for South Africans. 'This a job for Parliament and I know that the whole Parliamentary programme has to be revised. So that is a big deal, it's not easy to revise the entire Parliamentary programme to get a new fiscal framework through the portfolio committee and then through the plenary. 'So, Parliament going to have its work cut of for it and that will be in their hands,' Zille said. VAT Act Zille added that the DA will continue with Part B of its application to have the VAT act declared unconstitutional. 'We will continue with Part B of our application, that is to have clause 7.4 of the VAT Act declared unconstitutional because it gives the minister the power to impose a tax which only Parliament can do under the Constitution.' In order, the court said Gondongwana's announcement on 12 March 2025 made under section 7(4) of the VAT Act whereby the rate was adjusted by 0.5 percentage point to take effect on 1 May 2025 and the second 0.5 percentage point on 1 April 2026 is 'suspended pending the passing of legislation regulating the VAT rate or the final determination of Part B whichever occurs first.' ALSO READ: Godongwana consents to court order against VAT increase Sars reaction Although Sars Commissioner Edward Kieswetter was listed as a respondent in the court case, he welcomed the matter, saying 'it is an important order that provides clarity to Sars to effectively and efficiently administer the VAT Act'. 'It also has practical implications for consumers and VAT vendors charged with managing VAT. 'The court's order suspends the 0.5 percentage point increase that was originally announced to come into effect on 1 May 201,5, and there is, therefore, no basis for VAT vendors to implement an increase of VAT rate,' Kieswetter said. ANC and EFF ANC national spokesperson Mahlengi Bhengu-Motsiri said the court has made no decision on the merits of the application that had been brought before by the DA and EFF. 'Parliament is now expected to pronounce on the way forward on the processing of the envisaged changes to the revenue proposals and the expenditure adjustments.' The EFF on Sunday said party leader Julius Malema will address a media briefing on Monday following the Western Cape High Court order which suspended the 0.5% VAT increases and set aside the 2025 Fiscal Framework and revenue proposals. ALSO READ: DA files supplementary affidavit to block the proposed VAT hike
