Budget 2.0 | VAT Hike Fury: Godongwana’s “Balancing Act” Crushes South Africa’s Poor
VAT Hike Fury: A Slap in the Face for Struggling Households
Finance Minister Enoch Godongwana’s much-anticipated Budget 2.0 has ignited a firestorm of anger. Despair has spread across South Africa as millions grapple with the bitter reality of a 0.5% VAT hike fury set to take effect in 2025. The hike, which raises VAT to 15.5%, comes despite fierce opposition from civil society, unions, and opposition parties.
They have labelled it a “cruel betrayal” of the nation’s most vulnerable. For families already drowning in the costs of food, fuel, and electricity, this move is overwhelming. It is more than just a policy adjustment. It’s a declaration of war on their survival.
This isn’t a budget. It’s a death sentence. Thandi Mbeki snapped, her voice trembling with rage. She is a single mother of three in Khayelitsha. “How dare they make bread and milk even more expensive? My children are hungry now—not after some ‘future economic growth’ fantasy.” Her words echo the fury of millions. They see the VAT hike as proof that the ANC-led government prioritises austerity over humanity.
Political Backlash and VAT Hike Fury: Coalition Cracks Widen
The Democratic Alliance (DA) has outright rejected the budget. They accuse the ANC of “recycling apartheid-era oppression.” The DA claims the ANC forces low-income households to shoulder the country’s fiscal failures. “This VAT hike is economic sabotage,” DA leader John Steenhuisen thundered during a press briefing. The ANC would rather harm poor South Africans than reduce corruption within their own ranks.
In a shocking twist, the Economic Freedom Fighters (EFF) extended an olive branch to the DA. This signalled rare cross-party unity against the VAT increase. “Even enemies can agree when the poor are under attack,” EFF spokesperson Sinawo Thambo declared. Critics were quick to question the sincerity of the gesture. Meanwhile, the ANC’s coalition partners in the Government of National Unity (GNU) face mounting pressure. They need to justify their support for a policy that has sparked nationwide protests.
Civil Society’s VAT Hike Fury: “Betrayal Masquerading as Compromise”
Civil society organisations have strongly criticised Godongwana’s “half-hearted” concessions. They noted that although the initial 1% VAT proposal was reduced by half, it offers little relief. It does not cushion the blow for households spending over 60% of their income on food. “A 0.5% hike is still a hike,” stressed Zanele Mthembu of the People’s Budget Coalition. “This isn’t compromise—it’s betrayal in slow motion.”
How dare they make bread and milk even more expensive? My children are hungry now—not after some ‘future economic growth’ fantasy.
Trade unions like Fedusa have joined the outcry, demanding higher taxes for the wealthy and corporations instead. “Why must a domestic worker pay more for soap while billionaires dodge taxes?” asked Fedusa’s Trevor Malope. The Treasury’s claim that the VAT increase will generate R15 billion in revenue has done nothing to quell the uproar. Critics argue that the math ignores the human cost.
VAT Hike Fury Meets Empty Promises: Grants Can’t Erase the Pain
The budget includes above-inflation increases to social grants. There is a R50 boost to the Child Support Grant and R100 for pensions. Despite these increases, the adjustments ring hollow for many. “These grants are lifelines, but they’re still crumbs,” said Sipho Dlamini, a grant recipient in Soweto. “R50 won’t cover the VAT on a week’s groceries. We’re being set up to fail.”
This VAT hike is economic sabotage
Economists warn that the VAT hike will disproportionately harm informal traders. Rural communities will suffer where access to exempt goods is limited. “This setup is rigged,” said economist Dr. Lindiwe Nkosi. “Wealthy elites can absorb the hike; the poor will starve.”
VAT Hike Fury: A Legacy of Broken Trust
This marks South Africa’s first VAT increase since the contentious jump to 15% in 2018. This decision sparked similar outrage. Godongwana’s insistence that the move is “fiscally responsible” has done little to reassure citizens who’ve watched corruption erode public funds. “Where’s the accountability for the billions lost to mismanagement?” demanded activist Nomalanga Khumalo. “We’re paying for their crimes—again.”
With trust in the ANC at an all-time low and opposition parties capitalising on the VAT hike fury, Budget 2.0 will mark a turning point in South Africa’s political landscape. As protests mount and coalition tensions boil over, one truth is undeniable: the people’s patience has run out.
People Also Ask About VAT Hike Fury
Is VAT increasing in South Africa?
Yes, VAT is increasing by 0.5% to 15.5% in 2025. This is a slap in the face for millions of South Africans who are already struggling to make ends meet. This hike will make basic necessities like food and medicine even more unaffordable, pushing already vulnerable households deeper into poverty.
How much is VAT in South Africa in 2025?
In 2025, VAT will rise to 15.5%, a cruel blow to low-income families who spend most of their earnings on VAT-taxed goods. This increase is a stark reminder. It shows how the government prioritises balancing budgets over protecting its people from hunger and hardship.
What happens if VAT goes up?
When VAT goes up, the poor suffer the most. Prices for essentials like bread, milk, and soap will skyrocket. Families will have to choose between eating and paying bills. It’s a heartless policy that punishes the most vulnerable while the wealthy barely feel the pinch.
Who is exempt from paying VAT in South Africa?
Even though some items, like basic foodstuffs are VAT-exempt, many poor households still rely on non-exempt goods. These include cleaning products and school supplies. This exemption is a hollow comfort when the cost of living keeps climbing, leaving families drowning in debt and despair.
Which race pays the most taxes in South Africa?
Black South Africans make up the majority of the population. They bear the brunt of indirect taxes like VAT. Meanwhile, wealthier, predominantly white elites gain from tax loopholes and offshore accounts. This glaring inequality is a painful reminder of how systemic injustice continues to plague our society.
