Parliament’s Standing Committee on Finance has adopted its report on the fiscal framework that was tabled in Parliament by the Finance minister, Enoch Godongwana, last month.
The budget includes a zero-point-five percentage point VAT increase over the next two financial years.
The committee adopted the report with recommendations proposed by ActionSA, which includes that Treasury must be given 30 days to come up with alternatives to tax hikes.
The majority of the members of the committee – six out of 11 – voted in favor of this.
ActionSA MP, Allan Beesley explains his proposal.
“The fiscal framework tabled by the Minister of Finance is supported subject to the strict conditions that National Treasury facilitate a receipt of substitute revenue proposals from the committee together with corresponding expenditure savings that will form the basis of an alternative revenue proposal, instead of a the proposed zero point five percent point increase in value added tax for the 25/26 financial year effective 1 May 2025 in respect of which the committee has expressed serious concerns.”
The majority of the members of the committee, the African National Congress (ANC), ActionSA and Inkatha Freedom Party (IFP), voted in favor of this.
But Economic Freedom Fighters (EFF) MP, Sinawo Tambo, says this process is likely to fail if legally challenged.
“As the EFF we want to reserve that legal right to approach the courts. The report that has come out of this Standing Committee of Finance now will not stand in any court of law and I can say so confidently. Because there was a complete lack of appreciation for the legislation that guides the adoption of the budget, that the adoption of the amendment of budget.”
The committee report will be tabled in the National Assembly on Wednesday, where it will be voted on.
The Democratic Alliance (DA) is among the parties in the Standing Committee of Finance who have proposed that the zero-point-five percentage point VAT increase for each of the next two financial years be scrapped.
This committee amends the revenue proposal of 0.5% that VAT rise begins on the 1st of May 2025 as well as the additional increase in proposals 26/27 thus bringing proposals in line with the revenue amount in the amended fiscal framework. Chair, those are the words we propose I am sending those words to the committee secretary to include. My final comments to this, we’re not making comments here on where the money should come from or go to, we are simply amending the fiscal framework to take out a VAT increase,” says DA’s Mark Burk.
