Who really won the VAT fight? GNU shakes as parties cry ‘deception’

Political parties have hurried to take credit for the decision to halt a Value-Added Tax (VAT) increase, accusing each other of extortion and deception.

In an announcement shortly after midnight on Thursday, National Treasury said the proposed 0.5% increase had been reversed and will remain at 15% next month.

The hike was contested by several political parties, including those who passed the budget earlier this month in Parliament.

Victory for the DA?

DA leader John Steenhuisen claimed his party had influenced the decision through it and the EFF’s court challenge to the increase.

“After the DA’s opposition to VAT in Cabinet, parliament, and the courts, the Treasury had no choice but to reverse its VAT hike decision.

“Our decisive court action has delivered its intended result. At every step, the DA fought to protect South Africans.”

DA Federal Council chairperson Helen Zille says she is unsure what the next step for the DA will be after the party was sidelined by the ANC once again.

In a press briefing in Cape Town on Thursday, Zille told reporters that she was disappointed that the ANC had cancelled a crucial coalition meeting to hold a media briefing with political parties outside the ruling government of national unity (GNU).

“What the future is going to be for the GNU is something that I cannot categorically answer now. A lot will depend on what happens today [Thursday].

“There is no doubt that the ANC and the smaller parties will hold a press conference to triumph these kinds of discussions and negotiations as if that is what led to the Minister backing down when he said last week he wouldn’t.”

Zille described the cancellation of the DA’s meeting with the ANC as “extraordinary.”

“What we have been asking for at the beginning of the mooted VAT increase is now coming to pass. The Minister has conceded that we were right in our arguments from the beginning, yet he seeks to undermine his major coalition partner by holding a press conference with parties outside the coalition to claim victory on a point we have been fighting for from the beginning,” she said.

Zille said the meeting with the ANC has now been moved to Friday.

She described the ANC as an untrustworthy coalition partner.

“The ANC had deliberately deceived the smaller parties into believing that they are prepared to drop the 0.5% increase when that was not their intention.

“This continues to expose how the ANC deals with its partners in whatever forum. Its important that this level of deception that happens repeatedly is also exposed to the voting public.”

Lack of trust in the GNU

Zille said coalitions should be based on mutual trust.

“The big problem is we have to operate in a low-trust environment. There is a low-trust environment within the ANC, but that also makes the trust environment between the ANC and its coalition partners very difficult to establish.”

Zille said it is a miracle that the GNU has survived for months despite the number of disagreements and mistrust.

“We always have to be wary. Can we accept what the ANC is saying to us? The ANC is very wary not to write things down, never to get anything on paper, and certainly not to sign anything.

“There is a clear disconnect in what is said in meetings and what gets done,” she said.

ALSO READ: Dismantling the GNU? — Mashaba’s next move after VAT increase U-turn

ANC and partners ‘saved the day’

Speaking hours later, ANC secretary-general Fikile Mbalula said it was the first time the ANC had experienced problems passing the budget and had learnt lessons from the fiasco.

Mbalula alluded to “political posturing” by the DA and praised those who had sided with it in the budget vote earlier this month.

He also questioned the DA’s court challenge, saying the party still believes that Godongwana has the power to introduce and change the budget.

“We will engage continuously with political parties about resetting the budget going forward,” he added.

IFP spokesperson Mkhuleko Hlengwa said the ANC and those who had voted with it on the budget had “saved the day”.

“Anybody else who masquerades as the Messiah of this moment outside this collective is wholly misplaced and misguided.”

He said a coalition government must talk to, not past, each other.

“There is no constructive conversations in a court of law.

“We cannot resolve our problems if we continue seeing the big brother syndrome that characterises some of the behaviour out there. We believe we need to turn to the negotiation table. You cannot be in government today, and then in opposition tomorrow. Either you are in or you are out”.

Other parties, including ActionSA, PA, and GOOD Party were also outspoken, accusing the DA of deceiving the public into believing its legal action had led to the U-turn.

“People are entitled to their opinions, but they are not entitled to their own facts. The fact is that what we are witnessing today is a victory through principled negotiations and political maturity. The truth will always survive, but the lies must stop,” said GOOD leader Patricia de Lille.

The winner at the polls

Political analyst Sanet Solomon said the decision not to increase VAT was a relief for struggling South Africans that would translate at the polls.

“It further alleviates the economic strain experienced by most households while allowing them to balance their existing financial commitments,” she said.

She also claimed it as a political win for the DA and the EFF who had taken the increase to court.

“This should solidify their respective support bases while displaying their commitments towards an improved quality of life for ordinary citizens. Their [the EFF and the DA’s] commitment towards fighting the VAT increase will positively benefit the country given that millions are living far below the poverty line”.

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