South Africa’s ruling African National Congress (ANC) has abandoned its proposal to raise value-added tax (VAT) by 0.5%, following resistance from political parties within the country’s parliament.
The plan, initially part of the national budget discussions, failed to gain support during negotiations with parties involved in the government of national unity. These talks revealed widespread opposition to the VAT increase, leading to its withdrawal.
The ANC has been in coalition with the Democratic Alliance and other smaller parties since it lost its parliamentary majority in the May elections, marking a historic shift in the country’s political landscape.
Tensions within the coalition heightened when the Democratic Alliance opposed a key budget bill. Despite this, the bill still passed with help from smaller parties outside the formal alliance.
Read:MKP refuses to be ANC’s ‘spare wheel’ in budget stand-off: Shivambu – SABC News
With the VAT increase scrapped, Finance Minister Enoch Godongwana now faces the challenge of finding an alternative way to cover a 13.5 billion rand shortfall in the national budget.
