The ANC plans to propose a 0.75% VAT increase in a revised budget, warning it may seek support from parties outside its 10-party coalition, including the EFF, if current allies like the DA oppose the move.

Finance Minister Enoch Godongwana's initial proposal to raise VAT to 17% faced resistance, delaying the budget's presentation to March 12.

Following the DA’s blocking of the budget, the President issued commentary during a speech at the G20, where he compared the present situation to the recent collapse of the German governing coalition which led to fresh elections - implying that if the DA refuse to play ball, then they will carry the motion outside of the governing coalition.

This threat has now been made official.

The EFF, however, opposes the VAT hike, but expressed willingness to join a government of national unity if the DA exits the coalition. The DA rejects any VAT increase, advocating spending cuts instead, and criticized the ANC’s approach as reckless and harmful to the economy.

The DA released a statement saying that the ANC risks South Africa’s economic stability by pursuing a “tone-deaf” 0.75% VAT increase, ignoring objections from coalition partners and the public.

The DA opposes this approach and “rejects” the ANC's threats to partner with the EFF to pass a VAT-based budget, and advocates for slightly more market-liberal alternatives, different spending priorities, and increasing SARS enforcement capacity rather than raising tax rates.

They remain committed to the GNU, with their official stance, enunciated in a statement at the Cape Town Press Club late last year, being that they will remain in the coalition until the ANC collapses the economy or scraps the constitution.

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