Public Outcry Over Godongwana’s Controversial Budget Statement
Finance Minister Enoch Godongwana has sparked public outrage after linking the continuation of the COVID-19 Social Relief of Distress (SRD) grant to a proposed 2% Value Added Tax (VAT) hike. His statement that the VAT increase could be avoided if the SRD grant were cut has been met with strong opposition from advocacy groups, political parties, and economic analysts.
SRD Grant vs VAT Hike: The Controversial Statement
During recent budget discussions, Godongwana explained that the government is facing financial strain due to increased expenditures that are not accounted for in the budget. He suggested that reducing the SRD grant would remove the need for a VAT increase.
“Millions of unemployed South Africans rely on the SRD grant for survival. If you allowed me to cut the SRD, I wouldn’t increase anything,” Godongwana stated.
This statement has been interpreted as an ultimatum—forcing the public to choose between losing the grant or facing increased living costs due to higher VAT.
Black Sash and Opposition Leaders Slam the Minister
Social justice advocacy group Black Sash condemned Godongwana’s comments, accusing him of using the SRD grant as a bargaining tool. Executive Director Rachel Rukasa criticized the minister for pitting poor South Africans against each other.
“To say the SRD grant is the reason he is in trouble now is shocking. His personal dislike of the grant should not be the reason behind such actions,” Rukasa said in an interview with Newzroom Afrika.
Opposition parties also rejected Godongwana’s proposal, with Jacob Zuma’s MK Party threatening mass protests if the VAT hike is implemented.
Budget Speech Postponed Amid Growing Tensions
The backlash against Godongwana’s VAT proposal has contributed to the postponement of the 2025 budget speech, initially scheduled for early March. Members of the Government of National Unity (GNU) rejected the proposed VAT increase last week, leading to political deadlock.
The African National Congress (ANC), Democratic Alliance (DA), and Economic Freedom Fighters (EFF) remain divided on how to address South Africa’s budget deficit, particularly regarding social welfare funding.
Public and Economic Concerns
Many economists warn that a VAT increase would disproportionately impact low-income households, raising prices on essential goods. Critics argue that the government should explore alternative revenue sources, such as corporate tax reforms, rather than increasing the tax burden on ordinary citizens.
Darren Campher, an economic activist, stated:
“They are targeting the poor. Instead of looking at wealth taxes or corporate taxes, they want to raise VAT, which directly affects low-income households the most.”
What’s Next for the SRD Grant and VAT Debate?
With the 2025 budget speech now rescheduled, discussions continue on whether the SRD grant will be maintained without a VAT hike. Advocacy groups and opposition parties are expected to challenge any policy that negatively impacts South Africa’s most vulnerable citizens.
The coming weeks will be crucial as the government seeks a solution that balances social welfare needs with fiscal responsibility.
Would you support a VAT hike to sustain the SRD grant, or should the government find alternative funding solutions? Share your thoughts in the comments.
Also read: Budget Speech 2025: Godongwana Weighs Scrapping SASSA SRD Grant to Avoid VAT Hike
