The increase would take VAT to 17%.
Godongwana on Tuesday afternoon told media, shortly after the unprecedented postponement, that the increase requires the deliberations of the cabinet before it is tabled in the National Assembly.
“Cabinet is united in the view that the budget must strike a balance between the interests of the public, economic growth and fiscal sustainability. Furthermore, the budget is produced and presented before the National Assembly according to the rules outlined in the Public Finance Management Act,” said Godongwana.
“Section 27 of the Public Finance Management Act requires that the annual budget be tabled before the start of the financial year or in exceptional circumstances on a date as soon as possible after the start of the financial year.
“Therefore, further discussion in the cabinet will take place in preparation for a new or amended budget to be tabled on March 12.”
Earlier in the day, President Cyril Ramaphosa called an urgent cabinet meeting which caused a delay to the start of proceedings.
SowetanLIVE
Budget speech to take place on March 12 after discussions with cabinet – Godongwana
Image: Esa Alexander
Finance minister Enoch Godongwana says he will deliver “a new or amended” budget speech on March 12.
The much-anticipated speech was postponed on Tuesday after concerns raised by members of the government of national unity on its contents, including a proposed 2% VAT increase.
The increase would take VAT to 17%.
Godongwana on Tuesday afternoon told media, shortly after the unprecedented postponement, that the increase requires the deliberations of the cabinet before it is tabled in the National Assembly.
“Cabinet is united in the view that the budget must strike a balance between the interests of the public, economic growth and fiscal sustainability. Furthermore, the budget is produced and presented before the National Assembly according to the rules outlined in the Public Finance Management Act,” said Godongwana.
“Section 27 of the Public Finance Management Act requires that the annual budget be tabled before the start of the financial year or in exceptional circumstances on a date as soon as possible after the start of the financial year.
“Therefore, further discussion in the cabinet will take place in preparation for a new or amended budget to be tabled on March 12.”
Earlier in the day, President Cyril Ramaphosa called an urgent cabinet meeting which caused a delay to the start of proceedings.
SowetanLIVE
WATCH | Budget speech postponed
Budget speech cancelled following 'dispute over VAT'
Economists forecast increase in VAT or income tax to balance budget
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