DR Elphus Ndou, Wits University- Economist, says we need the budget that is inclusive
This as the Finance Minister, Enoch Godongwana will present the third iteration of SA’s 2025 national budget, at a very wet and cold Cape Town, today.
The Budget 3.0 follows the two failed tabling budget address earlier this year.
With a R75 billion revenue hole created by the scrapping of the planned VAT increases, Treasury will need to make difficult decisions to maintain fiscal consolidation while addressing slowing economic growth and mounting government debt.
The most significant change in Budget 3.0 is the removal of the proposed VAT increases – initially a two-percentage-point hike and later, in Budget 2.0, revised down to 0.5 percentage points in 2025 and 2026.
After strong political resistance – notably from the DA and the EFF – and a court order barring the VAT hike, Treasury now faces a major funding gap.
SAFTUs Zwelinzima Vavi, says they demand 45% to be charged on corporate tax.
How the minister will navigate this, remains to be seen later today.
Both the President Cyril Matamela Ramaphosa, is in US for what has been labelled ‘tense’ talks with Pres Donald Trump, and his deputy Paul Mashatile, is in France for economical engagements.
Pres Ramaphosa and his counterpart are scheduled to meet later this evening to discuss burning issues that has the world on its knees.
