Advocacy group Black Sash has accused Finance Minister Enoch Godongwana of neglecting the majority of South Africans in his proposed Budget Speech on Wednesday.
The group previously criticized Godongwana for using the Social Relief of Distress (SRD) grant as leverage to support a VAT increase, claiming that a VAT hike could be avoided if COVID-19 SRD grants were reduced.
In his 2025 Budget Speech, Godongwana announced an increase in Value Added Tax (VAT) by 0.5 percentage points in both 2025 and 2026, raising the VAT rate to 16% by 2026/2027.
Despite widespread opposition from the Government of National Unity (GNU), which expressed concerns about the negative impact on ordinary South Africans, Godongwana proceeded with the VAT hike. The MK Party, led by Jacob Zuma, even threatened to bring the country to a standstill if the minister continued with the increase.
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The Minister also proposed increases in several social grants, including:
- War veterans grant: R2205 to R2335
- Disability grant: R2185 to R2315
- Foster care grant: R1180 to R1250
- Care dependency grant: R2185 to R2315
- Child support grant: R530 to R560
Grant-in-aid: R530 to R560
- Old age grant: R2185 to R2315
However, Black Sash questioned whether these increases would meaningfully improve the lives of South Africa's poor, especially in light of the VAT hike
."The VAT increase signals a troubling reversal in the government’s social contract with its citizens, particularly given the already high cost of living. We believe the Minister has exhausted all options for generating revenue and is relying on a VAT hike, a short-sighted solution that will worsen inequality and hardship for millions of South Africans." the group said.
Black Sash opposed any VAT increase, asserting that it unfairly burdens those already struggling to make ends meet. The group urged the Minister and members of the GNU to consider progressive tax reforms that target wealthier individuals and corporations, who have the capacity to contribute more to the country’s fiscal needs.
The group also demanded clarity on the future of the SRD grant.
"We demand clarity on the future of the SRD grant and reaffirm our call for the introduction of a Basic Income Support Grant as part of a broader commitment to social and economic justice."
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