by AKANI CHAUKE
JOHANNESBURG, (CAJ News) – SOUTH Africans heaved a collective sigh of relief after the government reversed a decision to impose the divisive value added tax (VAT).
However, this relief has emerged as a source for parties in and outside the coalition government to grandstand each claim to have masterminded the breakthrough.
Suffice to say this is a dent to the reputation of the ex-liberator movement, the African National Congress (ANC), which had unilaterally imposed the tax, angering fellow coalition government partners.
After a series of meetings with smaller parties and a showdown with the main partner in government, the Democratic Alliance (DA), the factionalised party of President Cyril Ramaphosa and formerly Nelson Mandela succumbed to pressure and has reversed the tax decision.
VAT was to be imposed with effect from May 1, by 0,5 percent but while the figure looks small, South Africans are already searing under serious economic hardships and are frustrated by the ANC’s failure to reform the economy from the clutches of the white minority.
This as the country is to celebrate 31 years of the end of the repressive apartheid on Sunday.
The VAT saga divided the unity government and in contrast, brought together the fiercest rivals in South Africa, comprising the DA and the militant Economic Freedom Fighters (EFF).
They mounted a court challenge against the imposition of the VAT, arguably the first time ever the two parties that are oil and water agreed on anything.
Thursday, South Africans woke up to the announcement that the Treasury would withdraw the hike. It is reported the Treasury and the Minister of Finance, the embattled Finance minister, Enoch Godongwana, were staring a legal defeat.
The DA claimed “a major victory” and more importantly, for millions of South Africans.
“This outcome follows sustained opposition by the DA in Cabinet, Parliament, and, most decisively, the courts,” said Helen Zille, DA Federal Council chairperson.
She added, “Treasury’s retreat is not a reconsideration. It is a retreat born of necessity in the face of likely legal defeat.”
With the VAT issue dividing the coalition that has been at the helm since last year, the ANC had to negotiate with parties outside the arrangement.
Among these is the Build One SA (BOSA) of Mmusi Maimane, former leader of the DA.
While the VAT reversal is a victory for all, the pettiness among parties has been evident, with Maimane lashing at Zille for claiming victory.
Fikile Mbalula, ANC Secretary General, also criticised the DA.
“The DA did not win in Cabinet, in Parliament, or in the courts,” said Mbalula.
“What they seek to brand as a “victory” is in fact the result of ANC-led consultations and consensus-building.”
ANC and DA have been in perennial squabbles since the coalition assumed power in June 2024, a month after the ANC lost its legislative majority.
Amidst the VAT fallout, calls are mounting for Godongwana to step down.
EFF and the uMkhonto weSizwe (MK) party, the latter of Ramaphosa’s nemesis, Jacob Zuma are leading the call.
“We must demand now that Godongwana must resign with immediate effect because what he did was attempted murder,” said Floyd Shivambu, MK Secretary General.
Julius Malema, EFF leader, said: “This entire budget fiasco should be a reflection for the Minister of Finance and his Director General that they are out of depth and pose a threat to the economic stability of the country and, by consequence, are a threat to the livelihoods of South Africans.”
Local government polls are scheduled for 2026, with ANC projected to lose control again the control.
The last time VAT was raised was in 2018 when it increased from 14 percent to 15 percent.
– CAJ News