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Political effect appears in S-Africa over VAT increase
(MENAFN) The African National Congress (ANC) is facing mounting criticism over its push to increase Value-Added Tax (VAT), a move analysts warn could have serious political and economic consequences, particularly as poverty rises among black South Africans.
With parliament set to vote on the ANC’s budget proposal in less than two months, the ruling party is seeking backing from the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe Party (MKP). However, experts caution that aligning with these parties while pushing a tax hike could be politically risky.
Several major political parties have already rejected the proposed VAT increase for 2025. Finance Minister Enoch Godongwana initially proposed a two-percentage-point increase but later revised it to a one-point hike spread over two years. Despite this concession, most opposition parties remain firmly against the measure.
The ANC, once dominant in parliament, now faces a shifting political landscape, particularly after being forced to co-govern with the Democratic Alliance (DA) and other parties.
Dr. Metji Makgoba, a political analyst and senior lecturer at the University of Limpopo, warned that the ANC's move could alienate its core voter base. He also noted that if the EFF and MKP fail to oppose the tax hike, they risk losing credibility among their supporters, as both parties have built their platforms on advocating for economic justice.
“The ANC has historically positioned itself as a pro-poor party, but pushing for a tax increase that disproportionately impacts the working class undermines that commitment,” Makgoba explained.
The DA’s opposition to the VAT hike has further complicated matters for the ANC. By rejecting the tax increase, the DA is positioning itself as more responsive to the economic struggles of ordinary South Africans, despite its broader neoliberal policies.
“This is more than just an economic policy debate—it’s a test of political strategy and ideological consistency,” Makgoba noted. “If the ANC continues to push for the VAT hike despite widespread opposition, it risks further public disillusionment and a decline in electoral support.”
As the budget vote nears, the outcome could reshape political alliances and redefine South Africa’s political landscape. Former Standing Committee on Public Accounts (Scopa) chair and African People’s Convention (APC) leader Themba Godi argued that the VAT debate highlights divisions within the coalition government.
“The ANC has limited options because the DA is standing firm and making political demands,” Godi said. “This could push the ANC to seek stronger alliances with black-led parties instead of being reliant on the DA within the coalition.”
With tensions rising, the ANC faces a critical decision that could determine both its political future and South Africa’s economic direction.
With parliament set to vote on the ANC’s budget proposal in less than two months, the ruling party is seeking backing from the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe Party (MKP). However, experts caution that aligning with these parties while pushing a tax hike could be politically risky.
Several major political parties have already rejected the proposed VAT increase for 2025. Finance Minister Enoch Godongwana initially proposed a two-percentage-point increase but later revised it to a one-point hike spread over two years. Despite this concession, most opposition parties remain firmly against the measure.
The ANC, once dominant in parliament, now faces a shifting political landscape, particularly after being forced to co-govern with the Democratic Alliance (DA) and other parties.
Dr. Metji Makgoba, a political analyst and senior lecturer at the University of Limpopo, warned that the ANC's move could alienate its core voter base. He also noted that if the EFF and MKP fail to oppose the tax hike, they risk losing credibility among their supporters, as both parties have built their platforms on advocating for economic justice.
“The ANC has historically positioned itself as a pro-poor party, but pushing for a tax increase that disproportionately impacts the working class undermines that commitment,” Makgoba explained.
The DA’s opposition to the VAT hike has further complicated matters for the ANC. By rejecting the tax increase, the DA is positioning itself as more responsive to the economic struggles of ordinary South Africans, despite its broader neoliberal policies.
“This is more than just an economic policy debate—it’s a test of political strategy and ideological consistency,” Makgoba noted. “If the ANC continues to push for the VAT hike despite widespread opposition, it risks further public disillusionment and a decline in electoral support.”
As the budget vote nears, the outcome could reshape political alliances and redefine South Africa’s political landscape. Former Standing Committee on Public Accounts (Scopa) chair and African People’s Convention (APC) leader Themba Godi argued that the VAT debate highlights divisions within the coalition government.
“The ANC has limited options because the DA is standing firm and making political demands,” Godi said. “This could push the ANC to seek stronger alliances with black-led parties instead of being reliant on the DA within the coalition.”
With tensions rising, the ANC faces a critical decision that could determine both its political future and South Africa’s economic direction.
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