Cape Town – South Africa’s 2025 Budget Speech, scheduled for 19 February, has been postponed indefinitely in an unprecedented move.
The delay follows intense internal disagreements within the Government of National Unity (GNU) over key budget proposals—particularly a controversial 2% increase in Value-Added Tax (VAT).
The announcement was made by National Assembly Speaker Thoko Didiza, who confirmed that the executive had failed to reach a consensus.
“While today we have been gathered here to have the Minister of Finance (Enoch Godongwana) present the budget to the House, there has not been agreement in terms of parties in the executive to find one another in proposals of the budget,” said Didiza.
As a result, the Budget Speech, which was scheduled to take place two weeks after President Cyril Ramaphosa’s landmark 2025 SONA speech, has been postponed to March 12, 2025, allowing time for further negotiations.
“The cabinet decided not to come and do a presentation of the budget and allow themselves enough time to re-look the budget and come back to this House in March, the time in which they will inform us,” she added.
DA Claims Victory in Budget Showdown
The Democratic Alliance (DA) has taken credit for forcing the delay, citing its strong opposition to the proposed 2% VAT hike.
“Today’s Budget Speech has been postponed following intense DA pressure against a proposed 2% VAT increase by the ANC,” the party stated.
The DA made it clear that if the VAT hike had been included in the budget, it was prepared to vote against it.
“The DA will keep fighting to protect South Africans from higher taxes and fewer jobs! Join our fight by signing our petition against ANC’s 2% VAT Increase,” the party shared on X. See the DA’s full statement here.
Political deadlock over VAT Hike
The main point of contention in the budget negotiations has been the proposed increase in VAT from 15% to 17%. This move was confirmed by a leaked SARS tax summary document, which outlined the expected hike.
While some adjustments to the zero-rated tax basket were planned to soften the impact on lower-income households, opposition parties—led by the DA—strongly opposed the increase, arguing that it would hurt consumers and economic growth.
In response to the growing division, President Cyril Ramaphosa called an emergency cabinet meeting just hours before the scheduled speech. The goal was to allow Finance Minister Enoch Godongwana to present his case to GNU parties in an attempt to salvage the situation. However, a resolution was not reached in time.
A historic budget in a new political era
This year’s budget is historic as it is the first to be crafted by a non-majority government in South Africa’s democratic history.
Following the 2024 national elections, the ANC lost its parliamentary majority, securing only 40% of the vote. This led to the formation of the GNU, a coalition aimed at broader political representation.
While the GNU has been praised for its inclusivity, this latest crisis underscores the challenges of coalition governance. The budget deadlock has raised concerns about the government’s ability to implement effective fiscal policies without prolonged political infighting.
For now, South Africa waits for further developments. The Budget Speech is expected to return to Parliament in March, but whether an agreement can be reached remains uncertain.
