ANC may drop proposed VAT hike amid coalition pushback
The African National Congress (ANC) is reportedly reconsidering its proposed 0.5% VAT increase for the 2025 budget, following significant resistance from its Government of National Unity (GNU) partners, including the Democratic Alliance (DA).
The increase was expected to generate R13.5 billion, but growing political pressure especially from ActionSA, which has threatened to pull its budget support, and the DA, which is exploring legal options has forced the ANC to rethink its approach.
A senior ANC official acknowledged that maintaining unity within the coalition may require compromising on the VAT plan. With the National Assembly set to meet on 6 May, discussions are still ongoing. Should the proposal be scrapped, Finance Minister Enoch Godongwana will have to explore other means of bridging the budget deficit.