As tensions mount within the national government over the controversial proposal to increase Value-Added Tax (VAT) by 2%, the Government of Provincial Unity (GPU) in KwaZulu-Natal has also voiced its strong opposition to the hike. This alliance, consisting of former political rivals including the IFP, ANC, DA, and NFP, is united in its belief that the VAT increase would have devastating effects on the country’s poorest citizens and the broader economy.
The clash over the proposed VAT hike led Finance Minister Enoch Godongwana to postpone his budget speech, originally scheduled for February 19, to March 12. Currently, VAT stands at 15%, and Godongwana has argued that the increase is necessary to help address the country’s staggering R60 billion budget shortfall.
However, political leaders in KZN are adamant that raising VAT would exacerbate poverty and inflation, placing additional strain on already struggling households. Lourens de Klerk, finance spokesperson for the IFP, emphasized that the proposal would negatively impact the entire country, especially the economically disadvantaged. “It will punish the poor,” he said, “and is a terrible idea that should be opposed by people of goodwill.”
Francois Rodgers, the DA’s provincial leader and Finance MEC, echoed these concerns, adding that such an increase would worsen the already dire poverty and unemployment situation in South Africa. Instead of hiking VAT, Rodgers suggested the Treasury explore other revenue sources, such as taxing the booming online gambling industry, which remains untaxed despite its growing size.
Simphiwe Khumalo, deputy chairperson of the NFP, also strongly opposed the VAT hike, saying it would burden the poor even further. He warned that small businesses, the backbone of the country’s economy, would collapse under the additional pressure, deepening the economic crisis. “People are struggling to make ends meet,” Khumalo said. “An increase in VAT will be devastating to millions of poor South Africans.”
Meanwhile, the ANC in KwaZulu-Natal, led by veteran Jeff Radebe, is planning a media briefing to address the VAT issue and other pressing matters. While the ANC has reportedly been courting the EFF to support the budget speech when it is presented on March 12, EFF leader Julius Malema has denied any behind-the-scenes discussions with the ANC.
With the debate around the VAT increase heating up, it is clear that the GPU in KwaZulu-Natal is firmly against the proposal, believing it will only exacerbate the country’s existing economic struggles and hurt the most vulnerable.
