Godongwana won’t resign despite VAT u-turn and political pressure
Finance Minister Enoch Godongwana has rejected calls to resign following the government’s dramatic reversal of a planned 0.5% increase in Value Added Tax (VAT), initially slated to take effect on May 1.
The about-face, confirmed on April 24, came in the wake of mounting political backlash and legal threats from within the ruling coalition and opposition parties. The Democratic Alliance (DA) and Economic Freedom Fighters (EFF) led the charge, arguing the VAT hike would hit low- and middle-income households hardest during a period of economic strain.
“My job is to introduce money bills, nothing says they must be popular,” Godongwana said, defending his position and emphasizing his constitutional mandate to propose necessary fiscal measures, even when unpopular.
Despite fierce criticism from the EFF who labeled Godongwana’s handling of the budget a “threat to South Africa’s economy” he retains the backing of the ANC, and there is currently no sign of an impending Cabinet reshuffle.
Analysts warn the reversal may undermine confidence in the government’s fiscal discipline, complicating future efforts to implement tax reforms and narrowing the space for policy manoeuvring ahead of national elections.