Image Source: Polity
Local – Opposition parties, including those in the Government of National Unity (GNU), have strongly condemned Finance Minister Enoch Godongwana’s proposal to increase VAT by one percentage point—split into two increments of 0.5 percentage points, the first taking effect this year and the second successive year.
They argue that the increase will disproportionately burden the poor and middle class while failing to address the structural issues of wasteful government spending and corruption.
EFF: “Malicious taxation on the poor”
The Economic Freedom Fighters (EFF) have rejected the VAT hike, calling it an attack on working-class South Africans. The party stated, “Increasing VAT will not lead to any sustainable or significant increase in revenue but will only put poor and working households under more pressure.”
The EFF further argued that the government deliberately introduced the increase in a phased manner after initially floating a two-percentage-point hike to gauge public reaction.
“A delayed and prolonged increase in VAT over a two-year period remains detrimental to the poor and the middle class and remains an unviable option to generate revenue.”
The party has called for a unified opposition response, urging Members of Parliament to use legislative tools to amend the proposed fiscal framework and protect citizens from what it describes as “malicious taxation.”
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DA: Broken GNU Agreements
The Democratic Alliance (DA) also firmly opposed the VAT increase, arguing that it violates the agreement reached within the GNU. The party had made its stance clear to the ANC, stating that tax increases would only be considered if they were temporary and accompanied by economic reforms to stimulate growth.
“The ANC refused to agree to these measures and instead insisted on two likely permanent VAT increases, which cumulatively will increase VAT by 1% over the next 2 years.” the DA said.
The party accused the ANC of refusing to share power and imposing a tax burden on South Africans to compensate for poor governance.
“It is deeply unfortunate that the ANC is prepared to sacrifice the South African people and risk the economic future of the country rather than accept it no longer has majority support.”
ActionSA: A “Stealth Tax” on South Africans
ActionSA echoed these concerns, criticising both the VAT increase and the failure to adjust income tax brackets for inflation, described as a “stealth tax” that quietly pushes more people into higher tax brackets without increasing their actual earnings.
“South Africans are expected to pay an additional R18 billion simply to bankroll government waste, failed policies, and corruption.”
The party argued that instead of raising taxes, the government should focus on reducing wasteful spending and tackling corruption, which remain the real drivers of the fiscal crisis.
“Ordinary citizens are being forced to pay for government failures, while those responsible for looting the state face no consequences.”
ActionSA warned that the VAT hike does not address the underlying problem but merely shifts the financial burden onto taxpayers while government inefficiencies persist. They argued that South Africa does not suffer from a lack of revenue but rather from poor financial management.
Without structural reforms to curb wasteful expenditure and improve accountability, the party maintains that citizens will continue to pay the price for mismanagement.
They urged the government to cut unnecessary expenditures and implement real anti-corruption measures instead of placing an additional burden on taxpayers, warning that without meaningful change, “they should prepare for another year of empty promises and continued inaction from the ruling coalition.”
