South Africa’s parliament approved the 2025 budget which was presented by Finance Minister Enoch Godongwana on Wednesday, 2 April 2025, despite strong opposition to a controversial increase in value-added tax (VAT).
To address government funding shortfalls, the VAT rate will rise from 15.0% to 15.5% effective 1 May 2025, followed by a further increase to 16.0% from 1 April 2026. Godongwana justified the tax increase as essential to maintaining public services, citing growing financial strain in key areas like health, education, transport, and security.
The legislation was approved by 194 votes to 182, with the African National Congress (ANC), the largest party, gaining the necessary support through a mix of smaller coalition partners and parties outside the coalition.
Earlier, Godongwana presented the 2025 Budget Speech on 12 March 2025. Originally scheduled for February, the budget was postponed due to internal disputes over the proposed VAT increase.
