South Africa’s 2025 fiscal framework has become a flashpoint for intense political disagreement following the government’s decision to scrap a proposed VAT increase and the contested adoption of the budget report in Parliament.
The African National Congress (ANC), which currently governs with a minority in the National Assembly, secured support for the framework by forming a tactical alliance with the Economic Freedom Fighters (EFF) and other smaller parties—effectively sidelining the Democratic Alliance (DA). This has led to accusations of undemocratic manoeuvring and procedural violations.
Bathong, you do remember that the 1% VAT increase was also not 'permanent' and yet here we are? 😕 https://t.co/JxRM9epfPK
— Ndeka (@peanut_moi) April 2, 2025
In a surprise turnaround, the ANC reversed its plan to raise Value Added Tax (VAT) from 15% to 16.5% following public backlash and pressure from opposition parties. The decision was welcomed by ActionSA, which called it a “fiscal victory for ordinary South Africans.”
“Scrapping the VAT hike and tax bracket creep is a win for fairness and financial justice,” said ActionSA leader Herman Mashaba. “Government was forced to listen because South Africans pushed back.”
Meanwhile, the EFF—despite aligning with the ANC on the broader fiscal framework—has issued a strong legal objection to the way the Standing Committee on Finance adopted the budget report on 1 April. In a formal letter addressed to Speaker Thoko Didiza and Committee Chairperson Dr Joe Maswanganyi, the party accused the committee of violating Section 8(4) of the Money Bills Amendment Procedure and Related Matters Act.
The EFF’s letter, signed by National Chairperson Nontando Nolutshungu, argues that the report lacks the legally required “clear statement” confirming whether the committee accepted or amended the 2025 fiscal framework before adoption. The party claims that no such resolution was formally voted on and alleges that wording confirming support was inserted after the fact, making the report “procedurally defective and vulnerable to legal challenge.”
They have demanded that the report be withdrawn from the Announcements, Tablings and Committee Reports (ATC) and from the Order Paper of the National Assembly. “Should this not occur, the EFF reserves its full legal rights and will consider urgent legal steps, including the possibility of an interdict,” the letter reads.
The Democratic Alliance (DA) has also voiced strong objections—not only to the now-abandoned VAT increase but to how the ANC navigated the budget process. In a statement, the DA said the ruling party “undermined proper parliamentary procedure” by ignoring formal opposition and instead forming “opportunistic coalitions” to push through its fiscal agenda.
“This budget process shows that the ANC is no longer interested in democratic consensus or transparent fiscal policy,” said DA Shadow Minister of Finance Dion George. “They tabled an unworkable plan, and when challenged, they simply reshuffled alliances.”
While the budget process moves forward in Parliament, the legal and political fallout is far from over. The EFF’s legal threat adds a new dimension to an already complex debate, with the legitimacy of the report now potentially at stake.
