Neelam Rahim | neelam@radioislam.co.za
3-minute read
14 April 2025 | 16:57 CAT

Cosatu protests against VAT increase in Cape Town ahead of the tabling of the Budget Speech on March 12, 2025. Image Credits : X@_cosatu

Mounting pressure from political parties and social partners is placing Finance Minister Enoch Godongwana under increasing scrutiny, as government faces fierce resistance over a proposed VAT hike ahead of the national budget announcement.

Treasury’s attempt to plug a staggering R250 billion deficit by raising Value Added Tax is being met with unified opposition. In an interview with Radio Islam International, Cosatu’s Parliamentary Coordinator, Matthew Parks, says the federation “would welcome” a decision to scrap the proposal, warning of its devastating effects on the working class.

“We can’t support a VAT hike or any other tax hikes which hurt the working class,” Parks asserted. “People are drowning in debt, they’re struggling with the rising cost of living.”

Parks revealed that Cosatu had raised concerns early on with both the ANC and the executive. “We’ve called for the scrapping of this VAT hike since the beginning of February. Most workers are already supporting unemployed family members. A hike would only make life more difficult for millions.”

Instead of burdening consumers further, Cosatu has proposed viable alternatives to Parliament and Treasury—proposals they believe could generate “even more” revenue without imposing additional pain on citizens. “Yes, it’s messy,” Parks admitted, “but we would prefer messiness over inflicting pain upon ordinary South Africans.”

The federation’s position reflects broader sentiment. “Society has reached a limit,” said Parks, pointing to a decade of economic strain, state capture and corruption scandals. “People don’t want to hear about further tax increases. They want to see the state fixing its spending habits.”

With just weeks to go before the budget takes effect, the ANC faces a mounting dilemma: proceed with a deeply unpopular tax increase, or take a new route that reflects the country’s dire socio-economic reality.

As consultations continue, one thing is clear—South Africans are calling not just for fiscal solutions, but for a government that listens.

Listen to the full interview on Your World Today with Mufti Yusuf Moosagie and Mathhew Parks here.