Economic Freedom Fighters (EFF)

The Economic Freedom Fighters (EFF) have fiercely condemned the adoption of the 2025 fiscal framework, alleging a secretive deal between the African National Congress (ANC) and the Democratic Alliance (DA) that includes a 0.5% Value Added Tax (VAT) hike. EFF National Spokesperson Sinawo Thambo labelled the move a betrayal of South Africa’s poor and working class, accusing the ANC and DA of using the budget as a tool for political horse-trading within the fragile Government of National Unity (GNU). This explosive claim has deepened tensions as the 2 April 2025 budget vote looms, threatening to derail the coalition and spark a historic crisis in Parliament.

EFF Slams “Misleading” Fiscal Framework Defence

In a scathing statement, Thambo rejected the closing remarks of Dr. Joe Maswanganyi, Chairperson of the Standing Committee on Finance (SCof), during a joint meeting with the Select Committee on Finance. The meeting addressed public submissions on the 2025 fiscal framework and revenue proposals. Thambo accused Maswanganyi of delivering “unsolicited, biased, and misleading” arguments by insisting the fiscal framework is separate from the revenue bill that would raise VAT.

“Dr. Maswanganyi went on a tirade, lecturing us about how the fiscal framework is separate from passing the revenue bill that will increase VAT,” Thambo said. “This is both unfortunate and misleading.” He argued that the two are legally tied, citing the Money Bills Amendment Procedure and Related Matters Act of 2009. Specifically:

•   Section 7(2)(d) mandates that the national budget include tax and revenue proposals.
•   Section 8(3-4) requires parliamentary committees to report on both the fiscal framework and revenue proposals within 16 days of the budget’s tabling.
•   Section 11(3) ensures revenue amendments, like the VAT hike, align with the approved fiscal framework.

The EFF dismissed Maswanganyi’s stance as an abuse of power, claiming he was projecting the ANC’s internal struggles onto the committee. “The failure of the former liberation movement to garner support from the public on their own misguided and incompetent fiscal framework and revenue proposals is now being projected onto others,” Thambo added.

The Alleged ANC-DA Pact: VAT Hike for Legislative Trade-Offs

The EFF’s most damning allegation centres on a supposed deal between the ANC and DA. Thambo claimed the DA agreed to support the 0.5% VAT hike in exchange for the ANC scrapping transformative laws, including the Basic Education Laws Amendment (BELA) Act, the National Health Insurance (NHI) Act, and the Expropriation Act. These laws aim to address education access, universal healthcare, and land reform—issues central to South Africa’s post-apartheid redress agenda.

Finance Minister Enoch Godongwana inadvertently fuelled this narrative during a parliamentary session. “It has become clear that the so-called ‘GNU’ has resorted to manipulation,” Thambo said, pointing to Godongwana’s revelation that “the Democratic Alliance seeks to reverse legislation such as the BELA Act, NHI Act and Expropriation using its leverage in the coalition, in exchange for supporting a budget which includes a 0.5% VAT hike over the next two years.”

The DA has refuted these claims. Spokesperson Karabo Khakhau called them “ANC propaganda,” insisting the party’s budget stance prioritises economic growth over political concessions. Yet, a leaked letter reportedly sent by the DA to President Cyril Ramaphosa—acknowledged by ANC Secretary-General Fikile Mbalula—suggests the DA may have tied its support to scrapping the Expropriation Act, adding credibility to the EFF’s accusations.

Budget Talks Collapse: GNU Faces Breaking Point

The dispute has pushed the GNU to the brink. Formed after the ANC lost its majority in the 2024 elections, the coalition has struggled to align its diverse partners. The budget, tabled by Godongwana, aims to tackle a 74% debt-to-GDP ratio and a 4.6% deficit in 2025/2026, but the proposed VAT hike has united opposition from the EFF, Progressive Caucus, ActionSA, and now the DA.

DA spokesperson Khakhau confirmed negotiations hit a wall: “As of half past one today, there is no deal.” She accused the ANC of rejecting alternatives like cutting wasteful spending—such as ghost workers at PRASA, where audits found 10% of staff don’t exist—or revitalising Cape Town’s harbours, which could boost GDP by 5%. “It is ridiculous to not want a budget that is centred on making sure that South Africans can benefit from a growing economy and then still be bold enough to think you can charge the same South Africans more money,” she said.

Mbalula, however, insisted talks continue. “The discussions are not closed, and we’re continuing with that particular engagement,” he told the SCof. He hinted at flexibility, saying, “We are not confining ourselves only to the 0.5% increase,” but with the budget vote deadline approaching, the ANC risks failing to pass a budget for the first time in 30 years—a potential constitutional crisis.

Economic Stakes: VAT Hike’s Impact on South Africans

The proposed 0.5% VAT hike aims to raise revenue for education, healthcare, and infrastructure, but critics warn it will hit the poor hardest. With inflation already straining households and unemployment at 33%, the EFF argues it’s a senseless burden. “Increasing VAT will not lead to any sustainable or significant increase in revenue but will only put poor and working households under more pressure,” Thambo said, advocating for alternatives like tackling illicit financial flows and strengthening SARS.

The DA echoes this concern, pushing for pro-growth policies over tax hikes. Khakhau highlighted the Western Cape’s below-20% unemployment rate as proof of what’s possible with efficient governance. Meanwhile, COSATU, an ANC ally, has warned the hike could deepen poverty, amplifying public fears trending online under hashtags like #NoToVATHike and #ProtectThePoor.

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