Noluthando Hlopoyi – Free SA Spokesperson
PRESS RELEASE
For Immediate Release
19 February 2025
Free SA welcomes the decision to postpone the national budget speech amid fierce opposition to a proposed VAT hike. This moment marks a critical shift in South African politics—proof that Parliament is no longer a rubber stamp for bad policies and that reckless tax increases will no longer be pushed through without consequence.
The delay represents a major setback for the ANC-led GNU government, which is still heavily reliant on imposing higher taxes instead of fixing its spending habits. The proposed VAT hike, which could have seen rates rise from 15% to as much as 17%, would have been devastating to ordinary South Africans, especially low-income households already struggling with inflation, unemployment, and rising living costs.
A VAT increase is the worst possible decision in the current economic climate. It is a regressive tax that disproportionately affects the poor, raising the cost of essential goods and services while providing no corresponding relief. Instead of fostering economic growth, it would have further strained struggling households and small businesses.
“The government must understand that South Africans cannot afford to pay for its failures,” said Nolu Hlophoyi, spokesperson for Free SA. “The solution to our fiscal crisis is not to take more money from citizens but to spend public funds better—by cutting waste, eliminating corruption, and growing the economy.”
Free SA acknowledges and applauds the Democratic Alliance (DA) for taking a firm stand against the proposed VAT hike. This marks a turning point in South African politics—proof that the ANC can no longer unilaterally impose harmful economic policies without challenge. The DA’s refusal to rubber-stamp higher taxes demonstrates exactly the kind of leadership expected from a coalition partner that represents taxpayers and business owners.
However, opposing tax increases is not enough. The DA must now put forward a credible alternative. If South Africa is to stabilise its public finances without further burdening citizens, the answer lies not just in blocking VAT hikes but in advocating for the kind of pro-growth reforms that will expand the economy and the tax base.
If the ANC insists on raising VAT, the DA should use its leverage to demand bold, market-friendly reforms as part of a compromise. This includes privatise inefficient state-owned assets such as ports and railways, relaxing restrictive labour laws that stifle job creation, and cutting red tape that prevents businesses from growing. A tax hike without corresponding structural reforms will only entrench economic stagnation.
For the first time in 30 years, the ANC has been forced to negotiate rather than dictate. This is a victory for democracy, but now the DA must go further. It must turn this moment into an opportunity to push for real economic liberalisation—ensuring that any concession it makes in the GNU leads to meaningful, long-term benefits for all South Africans.
South Africa is now facing a near-European VAT rate, yet its citizens do not receive European-quality government services. Instead of fixing Eskom, stabilizing Transnet, or addressing wasteful public spending, the government continues to seek more revenue from struggling taxpayers.
Free SA calls on all political parties in the GNU to reject any tax increases until the government proves it can manage existing funds responsibly. There must be a renewed focus on cutting unnecessary expenditure, closing corruption loopholes, and ensuring that every rand collected is used for the benefit of the people.
“The postponement of the budget is a sign that things are changing,” Nolu Hlophoyi added. “Now, South Africans must demand that any future budget prioritises economic growth and responsible governance over short-sighted tax hikes.”
Free SA will continue to monitor developments and stand against any attempt to unfairly burden South African citizens with higher taxes.
Ends.
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Anneke Burns
Free SA Publicist
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About FREE SA:
At the Foundation for Rights of Expression and Equality (Free SA) we are committed to empowering South Africans to have their voices heard. In a true democracy, every opinion counts, and we ensure your voice resonates where it matters most: in Parliament, in public policy, and in the laws that shape our country. From advocating for democracy and equality to holding the government to account, we stand with you to demand transparent, responsive, and fair governance that serves its people.
To learn more, visit: https://www.freesa.org.za/