Finance minister sets date for third budget attempt

Finance minister Enoch Godongwana will return to parliament on 21 May to present his third attempt this year at getting a budget passed.

The minister announced the new budget date at a briefing on Wednesday in Pretoria.

Godongwana is revising his spending plans after a dispute within the governing coalition over a proposed tax increase forced him to backtrack. That left national treasury with a R75-billion shortfall to plug over the next three years.

The impasse over Godongwana’s previous two budget was triggered by objections from the Democratic Alliance — the second biggest group in the coalition — to a planned increase in the VAT rate. That raised investor fears that the business-friendly party might leave the alliance, providing an entry point for leftist parties like the Economic Freedom Fighters to join the government and jeopardise economic reforms.

Godongwana withdrew the proposed tax hike on 24 April, leaving the alliance intact. The about-turn has proved problematic for some retailers who are unable to reverse the amended pricing in their payment infrastructure before 1 May, when the originally proposed VAT increase was supposed to come into effect.

Coalition

A 10-party alliance took power after elections last year in which the ANC lost its parliamentary majority for the first time since the end of white minority rule in 1994, and its formation was heralded as a chance to boost job creation and feeble growth after years of under-performance.

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The dispute over the budget has drawn scrutiny of national treasury’s credibility. Some political parties including the EFF have called for Godongwana’s resignation — a call he’s rejected.  — S’thembile Cele, (c) 2025 Bloomberg LP

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