Zuko Komisa

Finance Minister Enoch Godongwana’s proposed 0.5% VAT increase has been officially suspended following a court order, ratified by the Western Cape High Court on April 27th. This decision formalises the Minister’s prior announcement to withdraw the controversial measure.
The agreement, reached between Godongwana, the Democratic Alliance (DA), and the Economic Freedom Fighters (EFF), led to the out-of-court settlement. National Treasury stated that the Minister welcomed the court order, aligning with his April 23rd announcement.
Godongwana’s affidavit clarified that the decision to withdraw stemmed from a lack of political support, evidenced by the Speaker’s letter of April 21st.
The initial proposal, included in the March 12th budget, aimed to address fiscal sustainability.
While the Minister defended the initial proposal as constitutional, he acknowledged public and political feedback, prompting the withdrawal.
This decision creates a R75 billion revenue shortfall, necessitating cuts in government spending and potentially impacting service delivery.
National Treasury emphasised Godongwana’s commitment to fiscal responsibility, stating he will explore alternative measures to ensure sustainable public finances. The court order provides clarity and certainty on the matter.
Point of View with Phemelo Motene spoke to EFF Senior Researcher Dr Gumani Tshimomola and SAFTU General Secretary, Zwelinzima Vavi.
Listen to the full conversation here:
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