South African budget delay over VAT hike shows cracks in coalition

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South African budget delay over VAT hike shows cracks in coalition

_{//business-finance.news-articles.net/content/202 .. lay-over-vat-hike-shows-cracks-in-coalition.html}
^{Published in Business and Finance on Wednesday, February 19th 2025 at 16:21 GMT by Reuters}

Mtambo CAPE TOWN (Reuters) - South Africa's national budget was postponed on Wednesday because the two biggest parties in the ruling coalition disagreed over raising value-added tax, an unprecedented delay that caused the rand and government bonds to fall.

The article from MSN discusses the political turmoil in South Africa surrounding the delay of the Medium-Term Budget Policy Statement (MTBPS) due to disagreements over a proposed Value Added Tax (VAT) increase. The Democratic Alliance (DA), part of the coalition government, has threatened to pull out if the VAT hike is implemented, highlighting the fragility of the coalition formed after the African National Congress (ANC) failed to secure a majority in the recent elections. Finance Minister Enoch Godongwana has been attempting to balance the budget amidst economic challenges, but the potential VAT increase has caused significant discord. This situation underscores the broader economic and political instability in South Africa, with the DA's stance reflecting public sentiment against further tax burdens on citizens already facing economic hardship. The delay in presenting the budget illustrates the cracks within the coalition, potentially leading to governmental instability or a reshuffling of political alliances.

Read the Full Reuters Article at:
[ https://www.msn.com/en-us/news/world/south-african-budget-delay-over-vat-hike-shows-cracks-in-coalition/ar-AA1zn2tm ]

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