If parliament has not passed the budget by April 1, the Public Finance Management Act (PFMA) allows government spending to continue based on the previous year’s budget allocations.
At the heart of ActionSA’s refusal to vote for the budget is the 0.5 percentage point increase in VAT tabled by finance minister Enoch Godongwana on March 12. In correspondence to the ANC, ActionSA national chairperson Michael Beaumont said the ANC had also failed to adequately consult before Godongwana tabled it in parliament.
“In our letter to the ANC, ActionSA conveyed the view that the proposed increases in both VAT and income tax (through income tax bracket creep) cannot be supported for a government that has failed to address its own considerable wastage and inefficiencies,” Beaumont said in a statement on Tuesday.
“Central to our decision is the reality that this budget arises from a GNU that did not consult ActionSA in the development of the proposed budget. ActionSA cannot impose tax increases on South Africans to support those in the GNU who are notionally opposed to these increases, yet continue implementing them at the expense of South Africans.”
ANC’s options dwindle further with ActionSA’s refusal to support budget
VAT's 0.5 percentage point increase a stumbling block
Image: Felix Dlangamandla
ActionSA, which won 1.2% of the vote and holds six seats in the National Assembly, has formally notified ANC’s budget negotiating team that it will not support the budget.
This leaves the ANC in parliament, led by chief whip Mdumiseni Ntuli, with fewer options outside the government of national unity (GNU) to pass the budget. The DA, MK party and EFF have all so far rejected it ahead of the April 2 deadline, when the National Assembly is due to meet to consider the 2025 fiscal framework proposals and the report from the standing committee of finance, which is holding public hearings on the budget.
The standing committee’s report includes proposals for amendments on the budget, which are then taken to the National Assembly.
The National Council of Provinces is also due to meet on April 2 to consider the standing committee’s report.
If parliament has not passed the budget by April 1, the Public Finance Management Act (PFMA) allows government spending to continue based on the previous year’s budget allocations.
At the heart of ActionSA’s refusal to vote for the budget is the 0.5 percentage point increase in VAT tabled by finance minister Enoch Godongwana on March 12. In correspondence to the ANC, ActionSA national chairperson Michael Beaumont said the ANC had also failed to adequately consult before Godongwana tabled it in parliament.
“In our letter to the ANC, ActionSA conveyed the view that the proposed increases in both VAT and income tax (through income tax bracket creep) cannot be supported for a government that has failed to address its own considerable wastage and inefficiencies,” Beaumont said in a statement on Tuesday.
“Central to our decision is the reality that this budget arises from a GNU that did not consult ActionSA in the development of the proposed budget. ActionSA cannot impose tax increases on South Africans to support those in the GNU who are notionally opposed to these increases, yet continue implementing them at the expense of South Africans.”
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