ActionSA warns ANC, scrap VAT hike or lose budget support
ActionSA has drawn a firm line on the 2025/26 national budget, warning the African National Congress (ANC) that its support is conditional on the scrapping of the proposed 0.5% VAT increase set to take effect in May 2025. The party argues that the hike would place an unnecessary burden on South Africans already facing economic hardship.
Athol Trollip, ActionSA’s parliamentary leader, clarified that the party’s initial backing of the fiscal framework approved by the National Assembly on April 2 was a strategic move to prevent financial instability.
However, the ANC now has 30 days to find alternative revenue sources to replace the estimated R13 billion from the VAT hike, as well as R19 billion from personal income tax adjustments. If these conditions aren’t met, ActionSA has vowed to withhold support for the remaining budget bills in the coming months.
With the ANC no longer holding an outright majority, it depends on support from smaller parties like ActionSA to pass legislation. The party has positioned itself as a “constructive opposition,” willing to cooperate but determined to hold the ANC accountable. To offset the VAT hike, ActionSA has proposed measures such as improved tax collection and reducing government spending.
The ANC now faces a critical decision, adjust its fiscal plans or risk losing key political backing. Whether it meets ActionSA’s demands remains to be seen, but the party’s warning signals a growing challenge to the government’s budget strategy.
