Tag Archives: the Minister of Finance

Minister of Finance, Enoch Godongwana reverse his 0.5% VAT increase decision

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Picture: The Minister of Finance, Enoch Godongwana

By OBAKENG MAJE

24 April 2025- The Minister of Finance, Enoch Godongwana said he will shortly introduce the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill (Rates Bill), which proposes to maintain the Value-Added Tax (VAT) rate at 15% from 1 May 2025, instead of the proposed increase to VAT announced in the Budget in March 2025. Godongwana said the decision to relinquish the increase follows extensive consultations with political parties and careful consideration of the recommendations of the parliamentary committees.

“By not increasing VAT, estimated revenue will fall short by around R75 billion over the medium term.  As a result, we have written to the Speaker of the National Assembly, Thoko Dididza, to indicate that I am withdrawing the Appropriation Bill and the Division of Revenue Bill, in order to propose expenditure adjustments to cover this shortfall in revenue.

“Parliament will be requested to adjust expenditure in a manner that ensures that the loss of revenue does not harm South Africa’s fiscal sustainability,” he said. 

Godongwana further said the decision not to increase VAT means that the measures to cushion lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited. He added that, to offset the unavoidable expenditure adjustments, any additional revenue collected by SARS may be considered for this purpose going forward.

“I will introduce a revised version of the Appropriation Bill and Division of Revenue Bill within the next few weeks. The initial proposal for an increase to the VAT rate was motivated by the urgent need to restore and replenish the funding of critical frontline services that had suffered reductions necessitated by the country’s constrained fiscal position,” said Godongwana.

He said there are many suggestions, however some of them would create greater negative consequences for growth and employment and some of them, while worthwhile, would not provide an immediate avenue for further revenue in the short term to replace a VAT increase. Godongwana said the National Treasury will, however, consider these and other proposals as potential amendments in upcoming budgets as mechanisms to increase the resources available. 

The Democratic Alliance (DA) said it will brief the media this morning following significant developments regarding the party’s legal action against the proposed VAT increase scheduled for 1 May 2025. According to our highly-placed source, the Minister of Finance, Enoch Godongwana has reversed the 0.5% VAT hike.

The DA National Communications Manager, Dominique Jeftha said after steadfast opposition by the DA, lawyers acting on behalf of Godongwana have approached the DA’s legal representatives with a proposal for an out-of-court settlement. Jeftha said this follows the DA’s application to interdict the VAT increase, which the party has opposed from the outset on the grounds of its impact on already struggling South African households.

“This development marks a major victory for the DA and a turning point in the fight to protect South Africans from unjustified financial burdens.

“The media briefing will take place at Room M24, Marks Building, Parliament, in Cape Town at 8:15am. The briefing will be addressed by the Chairperson of the DA Federal Council, Helen Zille, DA National Spokesperson and Member of Parliament (MP), Karabo Khakhau and DA National Spokesperson and Member of Parliament (MP), Willie Aucamp,” he said.

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DA calls for restoration of service delivery in Ditsobotla

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Picture: The residents of embattled Ditsobotla Local Municipality embark on protest over lack of electricity

By OBAKENG MAJE

10 January 2025- The Democratic Alliance (DA) in North West said it has today written to the National Minister of Cooperative Governance, Velenkosini Hlabisa, the Minister of Finance, Enoch Godongwana, and President Cyril Ramaphosa, requesting them to urgently place the Ditsobotla Local Municipality under Section 139(7) national administration to restore service delivery and good governance.

The DA said despite about 30 Section 139 North West provincial government interventions since 2000, which ultimately led to the dissolvent of the municipal council Ditsobotla in 2022 and the current efforts by the North West Department of Cooperative Governance, Human Settlements and Traditional Affairs (COGHSTA) to stabilise the financial situation of the municipality, these efforts have been ineffective largely due to ANC political instability and factionalism within the council and a reluctance to root out corruption.

The DA spokesperson on Cooperative Governance, Human Settlements and Traditional Affairs in North West, Chris Steyl said, repeated engagements by the provincial and national portfolio committees of COGTA and SCOPA, have not yielded any positive impact. Steyl said the Ditsobotla Local Municipality would appear before these committees in parliament and the Provincial Legislature, agree to implement committee recommendations and resolutions, only to discard these commitments the minute these committees adjourn.

“The municipality has collapsed and is completely bankrupt with its liabilities exceeding its assets. Service providers cannot be paid and refuse to respond to job orders.

“Water and electricity infrastructure has completely collapsed, leaving large sections of the municipality without any water and/or electricity supply for weeks on end, never mind the inability of the administration to respond to other service delivery needs,” he said.

Steyl further said residents are desperate and angry. He added that, seeing regular violent protest action take place, leaves other communities to endure the terrible situation created by the inability of the municipality to deliver services.

“They also have to endure the consequences of further damage to infrastructure, which compounds the general misery residents are forced to contend with.

“The DA has requested the President and the Ministers of COGTA and Finance to take control of the situation and conduct an independent financial assessment of the municipality,” said Steyl.

He said they should craft a funded and implementable recovery plan to stabilise the municipality and administer its affairs towards servicing residents, while an independent skills audit of all senior and middle management officials as well as a forensic financial audit is conducted.

Steyl said all municipal officials in senior and middle management who are identified to either lack the necessary skills, qualifications and experience to perform their functions must be removed from office.

“Municipal officials and political office bearers who are identified in any corrupt financial activities must be prosecuted and the necessary asset forfeiture processes initiated.

“These interventions are the only real hope for positive change in Ditsobotla. Dissolving the council yet again will not solve any of the structural issues that continue to persist, any such consideration must be rejected in its entirety,” he said.

Steyl said the time has come for decisive action to end the decades-long rot in Ditsobotla and restore the municipality to its former glory as an economic agri-economic hub in the North West.  

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