VAT hike set to haunt ANC at local government elections

The ANC is going to be punished once more by the disgruntled electorate in the 2026 local government elections and other polls over the proposed 2% VAT hike and the return of load shedding, experts say.

VAT hike a nail in the coffin for ANC

Independent political commentator Pule Monama said Finance Minister Enoch Godongwana might have hammered the last nail in the ANC’s coffin.

“This is another nail in the ANC coffin, it’s a self-inflicted act. The minister of finance, who himself does not have a very clean history, must be careful that he might cost the ANC whatever votes they might have got,” Monama said.

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Unisa political analyst Prof Lesiba Teffo said any increase in VAT would “definitely have an impact” on the ANC performance in future elections.

“It will be in the hearts and minds of the people when they go to the elections next year and beyond. It could reach that point.

“But it’s important to acknowledge and give credit to some of the ANC people who said ‘not on our watch’. This time around there was no line of march, they spoke from their own conscience and conviction,” Teffo said, citing International Relations and Cooperation Minister Ronald Lamola and Electricity Minister Kgosientsho Ramokgopa, among others.

“I still believe it ought not to have gone that far because evidence suggests the minister was told that it’s not going to fly, this is not the right thing,” Teffo said.

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Ramaphosa must also take blame

President Cyril Ramaphosa must also shoulder the blame for Godongwana’s insistence on implementing the increase as he wouldn’t have done it without consulting him.

“He may not have consulted others, but the president and his deputy must have known, otherwise I don’t think Godongwana would have gone that far to make such bold statement,” Teffo said.

“It is going to have an impact on them. You can pick it up on the ground that there is a fallout. One can only feel sorry for them because they are trying to renew, but there are these massive own goals,” he said.

Government should let VAT hike pass

Mpumalanga-based independent political analyst Goodenough Mashego said rather than increase VAT by 2% as proposed by Godongwana, the government should consider letting the whole issue pass or, if at all, implement a minimum 1% rise, but zero-rate foodstuff and health-related household goods so that the poor do not feel the pinch.

He said the basket of zero-rated goods ought to be expanded.

“I think the problem was the management of the VAT increase, not so much the increase itself.

“The ANC was clumsy in trying to sneak in the 2% rise when it managed to slot in 1% several years ago after consultation with the Congress of South African Trade Unions, Black Sash and other people, which did not have such an impact on people.”

He added: “It’s the middle class that pose a greater threat to the ANC rather than the poor, as they better understand finances and taxation matters.

“To manage this, the government should implement a 1% VAT increase, raising the consumer tax from 15% to 16% rather than 2%. But they must zero-rate more items that ordinary people usually purchase like foodstuff, washing power, body soaps and sanitary towels to insulate the poor,” Mashego said.

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Monama said Godongwana should have taken the advice of Sars boss Edward Kieswetter.

“The ANC needs to understand that if it still needs power, the local government elections could be its death,” he said.

“Local illiterate communities are talking about the GNU, but they are not talking good about the ANC within that set-up.

“The GNU works against it because every now and again it is exposed for the historical corruption it is accused of. It needs to make a good calculation if it still wants power or to increase its electoral outcomes.”

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