EFF leader Julius Malema believes the postponement of the Budget Speech last month was a political trick, claiming the government reduced the initially declined 2% VAT increase, only to increase it bit by bit, ultimately bringing the rate to 16%.
“This was not unexpected, they were playing tricks with us,” Malema said, while speaking on the sidelines of the Budget Speech on Wednesday afternoon, in Cape Town.
“They said 2%, but the real intention was to increase VAT with 0.5% this year and 0.5 % next year which will lead to 16%,” he said.
Finance Minister Enoch Godongwana confirmed in his 2025 Budget Speech that the government proposed raising the country’s VAT rate by 0.5 percentage points both in 2025 and 2026.
This will ultimately bring the VAT rate to 16% in 2026 and 2027.
To provide relief to lower-income households, the government also proposed additional VAT zero-rating on essential food items. There would be no changes to the fuel levy.
Malema vehemently opposed the VAT increase, accusing the government of lacking ideas to regenerate state revenue.
“We will not support any form of increase in the VAT,” he said. “Let’s tax the rich.”
The COVID-19 Social Relief of Distress (SRD) has been extended to March 2026 and was allocated R35.2 billion.
Godongwana noted the SRD will serve as a basis for future income support for unemployed people, with the programme’s future informed by a review of active labour market programmes.
Malema suggested increasing corporate tax and taxing wealthy people.
“Let the corporate tax be increased. Let the tax on the wealthy people of South Africa who buy buffaloes be for R22 million.”
“We are going to make sure that through our participation in the finance committee, we amend this budget and redirect the money from VAT into corporate tax,” Malema said.
Earlier, News reported that the EFF have invited the Democratic Alliance (DA) to the opposition benches to join discussions on opposing the VAT increase.
“If the DA is true to its word that it is rejecting an increase in VAT, it must come to the table and sit with other opposition parties and draft the necessary amendments, especially if it relates to taxation, to ensure that it does not affect the poor negatively,” EFF spokesperson Sinawo Tambo said.
However, DA spokesperson Karabo Khaukhau told that the issue had not been discussed.
“This hasn’t been discussed yet,” she said.
Politics
Get your news on the go, click here to join the News WhatsApp channel.
