COSATU
By Mpho Moloi
The Congress of South African Trade Unions (COSATU), along with various non-profit organisations, labour unions, and law firms, has voiced strong opposition to the proposed increase in Value-Added Tax (VAT) outlined in South Africa’s 2025 Budget. These stakeholders have urged Parliament to consider their inputs before finalising the fiscal framework and revenue proposals.
Public Hearings on Fiscal Framework and Revenue Proposals
A joint finance committee convened public hearings to deliberate on the fiscal framework and revenue proposals contained in the 2025 Budget. During these sessions, numerous organisations presented their concerns, particularly regarding the proposed 0.5 percentage point increase in VAT. Many advocated for alternative measures, such as implementing a wealth tax, to address the nation’s fiscal challenges without disproportionately impacting lower-income citizens.
COSATU’s Stance
COSATU Parliamentary Coordinator Matthew Parks emphasised that any increase in VAT would adversely affect the poor. He suggested that the government should focus on taxing the wealthy to generate additional revenue. Parks proposed measures including removing pension and medical rebates for top tax brackets, revisiting inheritance and estate duties, introducing a general wealth tax, and raising corporate taxes on affluent corporations. These steps, he argued, would shift the fiscal burden away from the poor to those who can afford it.
Legal Perspectives
Charles de Wet, a tax expert representing law firm ENS Africa, highlighted the complexities and potential pitfalls of implementing a staggered VAT increase over two years. He noted that by 2026, businesses would need to manage multiple VAT rates—15%, 15.5%, and 16%—which could lead to significant errors and potential penalties. De Wet underscored the necessity for a simplified and clear tax structure to avoid administrative challenges and ensure compliance.
Government’s Proposal and Rationale
The National Treasury has proposed increasing the VAT rate by 0.5 percentage points in 2025/26 and an additional 0.5 percentage points in 2026/27, aiming to raise R28 billion in additional revenue in 2025/26 and R14.5 billion in 2026/27. Finance Minister Enoch Godongwana acknowledged the difficulty of this decision but highlighted the pressing need to fund essential services such as education and healthcare. He assured that the government would implement measures to mitigate the impact on lower-income households, including expanding the list of VAT-zero-rated essential food items and refraining from increasing the fuel levy.   
Political Opposition and Delays
The proposed VAT increase has led to significant political opposition and delays in the budget approval process. Disagreements within the ruling coalition, particularly between the African National Congress (ANC) and its partners, have resulted in the postponement of the budget speech, an unprecedented event in post-apartheid South Africa. The Democratic Alliance (DA), a key coalition partner, has rejected the revised budget, with DA leader John Steenhuisen stating that the party would not support the budget in its current form. These disagreements underscore the challenges of achieving consensus on fiscal policies within a diverse political landscape.   
Public Sentiment and Demonstrations
Public sentiment has been largely against the VAT increase, with concerns that it would exacerbate the financial strain on already struggling households. COSATU has organised demonstrations to protest the proposed tax hike and budget austerity measures, reaffirming its commitment to advocating for the interests of workers and the poor. These protests reflect broader societal apprehensions about the potential impact of the VAT increase on the cost of living and economic inequality.
🔴 Central News Weekly Edition | Issue 98 🔴 Download the Latest Print and E-Edition | Headline: “Fezile Dabi Mayor Khasudi: ‘The Boreholes Exist, and the DA is Delivering for Residents”
Download Here:
Direct PDF Link:
https://centralnews.co.za/wp-content/uploads/2025/03/Central-News-Issue-098.pdf
Read all our publications on magzter:
https://www.magzter.com/ZA/Central-News-Pty-Ltd/Central-News/Newspaper/All-Issues
Central News also offers Sponsored Editorial Content, Podcasts , Radio / Social Media Simulcast, Video Production , Live Streaming Services, Press Conferences, and Paid Interviews (Video/Audio) etc.
We guarantee exceptional exposure, reach, and engagement, with an excellent return on investment.
Advertisement:
To place your advert on our platforms (Print Newspaper or Digital Platforms) : Please email : sales@centralnews.co.za
For Business Related:
business@centralnews.co.za
Newsroom:
Send your Stories / Media Statements To: newsroom@centralnews.co.za
General Info:
info@centralnews.co.za
Office Administrator:
admin@centralnews.co.za
Whatsapp / Call: 081 495 5487
Website: https://www.centralnews.co.za
Social Media Platforms (@centralnewsza) : Linkedin, Facebook, Tiktok, Twitter, Instagram, Youtube