ANC threatens to approach EFF to get budget passed — report

The ANC may consider leaning on the EFF to get finance minister Enoch Godongwana’s budget over the line.

Government of national unity (GNU) partners failed to reach a consensus on 19 February, with the budget vote postponed to 12 March.

The Democratic Alliance (DA) took credit for the avoidance of a 2% VAT increase, while other GNU parties stated in the aftermath that not voting for the budget was a collective decision.

0.75% compromise suggested

However, the ANC are said to be growing frustrated with the DA’s public anti-VAT increase stance, accusing them of politicising the issue to the detriment of the GNU.

“The last-minute postponement came about because of the failure by the ANC, and specifically finance minister Enoch Godongwana’s failure to engage meaningfully with the alternative proposals tabled by the DA,” the party stated following the stalled budget speech.

The parties have been locked in negotiations since the shock failure to pass the budget, with the Sunday Times reporting that ANC have threatened to approach the EFF for the required votes should the DA not budge.

Treasury is suggesting a 0.75% VAT increase, while the DA remains adamant that a VAT increase would negatively effect those already struggling to make ends meet.

“If the EFF want to support a VAT increase that will hurt the poor, then they must explain that to their electorate,” Steenhuisen told the Sunday Times.

VAT increase alternatives

Proposed alternatives to the VAT increase include increasing taxes on the wealthy, modernising the South African Revenue Service and tightening the flow of illicit goods.

Reduced spending, an increase in debt issuance, adjusting other taxes and accessing the Gold and Foreign Exchange Contingency Reserve Account were four options touted by Investec.

The South African Federation of Trade Unions (Saftu) have also come out in opposition to the VAT increase, calling the move a “direct assault on the working class”.

“We call for increased taxation on the wealthy and corporations, and stricter exchange controls to curb capital flight and tax evasion by the unpatriotic bourgeoisie,” Saftu stated.

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