South African National Assembly House Chairperson Cedric Frolick (C) announces the results of the vote on the 2025 Budget in parliament in Cape Town, South Africa, on April 2, 2025. South Africa's parliament on Wednesday passed the 2025 Budget tabled by Finance Minister Enoch Godongwana, despite strong opposition to a contentious increase in value-added tax (VAT). (Photo by Xabiso Mkhabela/Xinhua)
CAPE TOWN, April 2 (Xinhua) -- South Africa's parliament on Wednesday passed the 2025 Budget tabled by Finance Minister Enoch Godongwana, despite strong opposition to a contentious increase in value-added tax (VAT).
The legislation was approved by a narrow margin, with 194 lawmakers voting in favor and 182 against, while no members abstained.
Initially set for February, the budget was delayed due to internal disputes over the proposed VAT hike. On March 12, Godongwana presented the budget review to parliament, outlining a phased VAT increase to address government funding shortfalls. Under the plan, VAT will rise by 0.5 percentage points in 2025/26 and another 0.5 percentage points the following year, bringing the rate to 16 percent by the 2026/27 financial year.
In his budget speech, Godongwana defended the tax hike necessary to sustain public services amid mounting fiscal pressures in critical sectors such as health, education, transport, and security.
However, the increase sparked fierce political opposition. The Democratic Alliance (DA), the second-largest party in the ruling coalition, rejected the budget, citing concerns over tax hikes and government spending priorities. Godongwana previously revealed that the DA had signaled conditional support, provided the government withdrew the Expropriation Act.
After weeks of political wrangling and heated debate, the ruling African National Congress secured enough backing from smaller coalition partners and other political groups to push the budget through. ■
South African Finance Minister Enoch Godongwana speaks during the debate on the 2025 Budget in parliament in Cape Town, South Africa, on April 2, 2025. South Africa's parliament on Wednesday passed the 2025 Budget tabled by Finance Minister Enoch Godongwana, despite strong opposition to a contentious increase in value-added tax (VAT). (Photo by Xabiso Mkhabela/Xinhua)
South African Finance Minister Enoch Godongwana (Front) speaks during the debate on the 2025 Budget in parliament in Cape Town, South Africa, on April 2, 2025. South Africa's parliament on Wednesday passed the 2025 Budget tabled by Finance Minister Enoch Godongwana, despite strong opposition to a contentious increase in value-added tax (VAT). (Photo by Xabiso Mkhabela/Xinhua)
