South Africa’s Finance Minister, Enoch Godongwana, had to delay presenting the national budget because of a big disagreement within the coalition government.
According to BBC, the main issue was his plan to raise VAT (value-added tax) from 15% to 17%, which would have made everyday goods more expensive.
This idea faced strong opposition, especially from the Democratic Alliance (DA), the second-largest party in the coalition.
DA leader John Steenhuisen said raising VAT would “break the back of the economy” and hurt South Africans already struggling with high living costs.
BBC reports that this delay shocked the country because it’s the first time since 1994, when white-minority rule ended, that a budget presentation has been postponed.
The South African currency also dropped sharply against the US dollar as markets reacted badly to the news.
The ANC, which leads the coalition, lost its majority in last year’s elections and now relies on partners like the DA and Freedom Front Plus to govern.
These partners claimed they were not properly consulted about the VAT hike before the budget was due to be presented.
Godongwana told journalists that the VAT increase was discussed in cabinet last week, but the coalition partners felt left out. The budget is now rescheduled for March 12, giving the government time to resolve the disagreements.
BBC highlights that the opposition Economic Freedom Fighters (EFF) criticized the delay, calling it a sign of “weak and indecisive leadership.”
On the other hand, the DA celebrated the postponement as a “victory” and promised to push for a budget that supports economic growth and job creation.
This situation shows how tricky coalition governments can be, especially when tough decisions like tax hikes are needed.
BBC notes that South Africa’s economy is under pressure, and the delay adds more uncertainty for businesses and citizens. The next few weeks will be crucial as the government tries to find a budget plan that everyone can agree on.
Credit: BBC
https://www.bbc.com/news/articles/cly6npj3z89o