VAT Increase Rejection
By Nkosana Khumalo
Inkatha Freedom Party (IFP) leader Velenkosini Hlabisa has accused the Democratic Alliance (DA) of misleading the public regarding the postponement of the budget speech last month. Hlabisa dismissed the DA’s claims that its opposition to the proposed value-added tax (VAT) increase forced the Government of National Unity (GNU) to delay the speech.
As Finance Minister Enoch Godongwana prepares to deliver his revised budget on Wednesday, 12 March 2025, tensions within the GNU remain high. Meanwhile, Hlabisa is also pushing for a new bill to expedite the deportation of undocumented foreign nationals, a move that could further strain relations within the coalition.
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The Budget Speech Controversy
The controversy erupted in February 2025 when Finance Minister Enoch Godongwana was set to table the national budget—a crucial document outlining the country’s economic priorities. The budget was expected to address revenue shortfalls, social spending, and economic growth. However, a contentious two percentage point VAT increase proposed to boost state revenue became a sticking point.
Coalition partners within the GNU strongly opposed the increase, leading to the postponement of the budget speech. Shortly after, DA leader John Steenhuisen claimed that his party was the driving force behind the rejection of the VAT hike. On 15 February 2025, Steenhuisen stated:
“Our firm stance against the VAT hike forced the government to rethink its priorities.”However, Hlabisa has rejected this narrative. Speaking at the IFP’s provincial council meeting in Johannesburg on 9 March 2025, he accused the DA of distorting the facts:
“People sometimes get lost because of misinformation and misrepresentation of what happened in Cabinet and the discussion around the rejection of a two percentage VAT increase unfolded. I’m not calling anyone by name, but I’m saying anyone who claims that it was them, unfortunately, on my record, they are not the one who stood first to speak against the VAT increase.”Hlabisa further asserted that the DA was neither the first nor the second to reject the increase in Cabinet discussions, contradicting its claims.
Rising Tensions in the GNU
The incident has exposed fractures within the GNU, which was formed after the 2024 general elections when no party won an outright majority. The African National Congress (ANC), DA, and IFP—three of the biggest coalition partners—have struggled to find common ground on key policy issues.
According to Business Day (10 March 2025), negotiations within the GNU over the budget are still ongoing, with leaders attempting to balance fiscal responsibility with coalition demands.
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Hlabisa Proposes Deportation Bill for Undocumented Foreigners
Amid the VAT dispute, Hlabisa has shifted focus to immigration, announcing plans for a new bill to streamline the deportation of undocumented foreign nationals.
Speaking in Johannesburg, he emphasised the need for tougher measures to remove illegal immigrants who do not contribute specialized skills to the economy. He stated:
“Government must ensure those who are in South Africa illegally are returned to their home countries without unnecessary delays.”Hlabisa highlighted inefficiencies in the current deportation system, arguing that red tape and bureaucracy prevent the swift removal of illegal migrants.
Economic Impact of Undocumented Migration
Hlabisa framed his proposal as a job protection measure, arguing that undocumented migrants often occupy low-skilled jobs that should benefit impoverished South Africans.
“When the IFP campaigned last year, we were very clear that foreign nationals who do not provide a specialised skill and who are not documented must be assisted to go back to their countries.”He denied accusations of xenophobia, clarifying:
“We want to be clear; we are not xenophobic. We are against xenophobia, but South Africans must come first.”Public Reaction and Political Ramifications
Hlabisa’s stance reflects a growing national debate over undocumented migration. Home Affairs estimates that over 2 million undocumented foreigners live in South Africa, straining public services and job markets.
His proposal has received mixed reactions:
• Supporters argue that stricter immigration controls are needed to protect local jobs.
• Critics, including human rights organisations, warn that mass deportations could violate international laws.
• Opposition parties like the ANC favour a balanced approach, focusing on border security and legal pathways for migration.
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Hlabisa Thanks IFP Supporters for 2024 Election Success
At the Johannesburg council meeting, Hlabisa expressed gratitude to IFP supporters for backing the party in the 2024 elections, which saw it gain influence in national politics.
“We requested the voters to make the IFP part of the national cabinet of the government of South Africa, where policy decisions are made. It would be therefore amiss for me not to thank you. We thank you people of Gauteng.”The 2024 elections marked a turning point for the IFP:
• The ANC lost its parliamentary majority for the first time since 1994.
• The IFP secured 3.85% of the vote (17 seats) and joined the GNU, gaining representation in Cyril Ramaphosa’s cabinet.
• Hlabisa was appointed Minister of Cooperative Governance and Traditional Affairs, a historic moment for the party.
The IFP’s Growing Influence
Under Hlabisa’s leadership, the IFP has expanded beyond its KwaZulu-Natal stronghold, positioning itself as a key national player.
According to The Citizen (22 October 2024), Hlabisa stated that the IFP felt “at home” in the GNU after 100 days, though challenges remained—notably policy disagreements on VAT and National Health Insurance (NHI).
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Broader Political and Economic Implications
The budget postponement and deportation bill reflect deep economic and social challenges in South Africa.
Fiscal Uncertainty
The GNU’s indecision over VAT highlights its struggle to agree on economic policy. The South African Reserve Bank warned on 5 March 2025 that delayed budgets could:
• Hurt economic growth (forecasted at 4.2% for 2025).
• Disrupt government spending on critical services.
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