Coalition
partners derailed his budget after opposing his plan to raise value-added-tax
(VAT), which would have seen the prices of goods go up at a time when South
Africans are hard-hit by the cost-of-living crisis.
Godongwana is a
member of the African National Congress (ANC), which was forced to enter into a
coalition after losing its parliamentary majority in elections last year.
His failure to
table the budget sent shockwaves in South Africa, as it has never happened
since the end of white-minority rule in 1994.
The currency
plummeted against the US dollar, as markets reacted negatively to the news.
The Democratic
Alliance (DA), which is the second-biggest party in the coalition, was one of
the most vocal critics of the proposed budget.
Its leader John
Stenhuisen said the party could not in "good conscience" agree to a
VAT increase from 15% to 17% as it would have "broken back the back of our
economy".
VAT was last
increased in 2018 from 14% to 15%.
The ANC's other
coalition partners, like the Freedom Front Plus, said they were only told of
the proposed hike before Godongwana was due to table the budget.
Godongwana told
journalists that the planned increase was mentioned in the cabinet last week.
The budget will
now be tabled on 12 March, following further discussions to iron out
differences, he said. bbc
🚨 DA pressure halts the VAT hike! The Budget Speech was postponed due to its failure to deliver pro-growth & pro-jobs reforms.
— Democratic Alliance (@Our_DA) February 19, 2025
SA needs more jobs, NOT tax hikes! We reject any budget that doesn’t drive real economic growth. Join the fight by signing our petition at… pic.twitter.com/DWjbZaJRHJ
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