{"id":822008,"date":"2025-04-24T08:13:13","date_gmt":"2025-04-24T06:13:13","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=822008"},"modified":"2025-04-24T08:14:18","modified_gmt":"2025-04-24T06:14:18","slug":"finance-ministers-head-on-the-block","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/822008\/finance-ministers-head-on-the-block\/","title":{"rendered":"Finance Minister’s head on the block"},"content":{"rendered":"\n

Efficient Group chief economist Dawie Roodt said Finance Minister Enoch Godongwana\u2019s head is on the block following the VAT debacle.<\/p>\n\n\n\n

On Thursday, 24 April 2025, National Treasury announced that Godongwana will soon implement measures to reverse the planned 0.5 percentage point VAT increase.<\/p>\n\n\n\n

The value-added tax (VAT) increase was set to kick in on 1 May 2025. However, it faced fierce resistance, including legal cases from the DA and EFF.<\/p>\n\n\n\n

Godongwana initially wanted to implement a 2 percentage point VAT increase. However, the government of national unity (GNU) rejected this proposal.<\/p>\n\n\n\n

It forced the finance minister to postpone his planned 2025 Budget Speech, which was set to take place on 19 February 2025, to 12 March 2025.<\/p>\n\n\n\n

The National Treasury returned to the drawing board to find alternative ways to raise the additional income the government needed to support and grow the economy.<\/p>\n\n\n\n

It also provided additional time for the national unity government to discuss the budget and find the best way forward.<\/p>\n\n\n\n

On 12 March 2025, Godongwana delivered his 2025 Budget speech, announcing a 0.5 percentage point VAT increase.<\/p>\n\n\n\n

It caused a rift in the GNU, culminating in the Democratic Alliance launching a court challenge to stop a proposed value-added tax increase.<\/p>\n\n\n\n

\u201cThe DA is taking legal action to prevent what it believes to be an unjustified burden on already struggling South African households,\u201d it said in a statement before the hearing.<\/p>\n\n\n\n

\u201cThe party contends that the increase will further escalate the cost of living, disproportionately affecting the poor and vulnerable.\u201d<\/p>\n\n\n\n

Other stakeholders, including Roodt and retired judge and tax expert Dennis Davis, also said the VAT increase was unnecessary.<\/p>\n\n\n\n

Davis said that with a budget of around R2 trillion, the National Treasury should easily find R13.5 billion in savings, rendering the VAT increase unnecessary.<\/p>\n\n\n\n

Roodt said<\/a> the South African Revenue Service (SARS) collected around R10 billion more than expected in the previous financial year.<\/p>\n\n\n\n

\u201cHalf a percentage point increase will raise around R10 billion. That means the state has the money. We don\u2019t need to increase VAT,\u201d Roodt said.<\/p>\n\n\n\n

\u201cThere was an overrun in the previous financial year, which is enough to prevent the planned VAT increase.\u201d<\/p>\n\n\n\n

Finance Minister Enoch Godongwana\u2019s head on a block<\/h2>\n\n\n\n
\"\"<\/a>
Finance Minister Enoch Godongwana <\/figcaption><\/figure>\n\n\n\n

The VAT debacle caused a lot of damage to the ANC. Its voter base did not want a VAT increase, and the latest developments made it look weak and incompetent.<\/p>\n\n\n\n

Roodt said Godongwana’s amateurish handling of the 2025 Budget and planned VAT increase puts his position at risk.<\/p>\n\n\n\n

\u201cHe is not the best finance minister. However, he is the best the ANC can offer at this stage,\u201d Roodt said in an interview with Biznews<\/a>.<\/p>\n\n\n\n

\u201cThe VAT debacle was a blunder that cost the ANC big time. There will be pressure to replace him with a new finance minister.\u201d<\/p>\n\n\n\n

Roodt said Mcebisi Jonas, the former deputy finance minister, would be a brilliant choice to lead the country\u2019s financial portfolio.<\/p>\n\n\n\n

In June 2018, Mcebisi joined MTN as an independent non-executive director and was promoted to chairperson in December 2019. He also served on the Sygnia and Northam Platinum boards.<\/p>\n\n\n\n

He further heads Ntiso Investment Holdings, a leading partner in the consortium that became Apex Group’s black economic empowerment partner in October 2023.<\/p>\n\n\n\n

President Cyril Ramaphosa recently appointed Jonas as his special envoy to the United States to mend the relationship between the two nations.<\/p>\n\n\n\n

This shows that Ramaphosa has trust in Jonas and that he values his negotiation and business acumen.<\/p>\n\n\n\n

Roodt does not see Jonas as a long-term diplomat in the United States, saying the President’s decision to put him in that position was a blunder.<\/p>\n\n\n\n

Should Ramaphosa replace Godongwana as finance minister, it would not be a complete surprise.<\/p>\n\n\n\n

In March, Africa Intelligence reported<\/a> that Godongwana has told colleagues he will resign if the coalition government continues to reject the VAT hike.<\/p>\n","protected":false},"excerpt":{"rendered":"

Efficient Group chief economist Dawie Roodt said Finance Minister Enoch Godongwana\u2019s head is on the block following the VAT debacle.<\/p>\n","protected":false},"author":10,"featured_media":816322,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[1293,1459,17448,21799,22292],"class_list":["post-822008","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-cyril-ramaphosa","tag-dawie-roodt","tag-enoch-godongwana","tag-finance-minister-enoch-godongwana","tag-mcebisi-jonas"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822008","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=822008"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822008\/revisions"}],"predecessor-version":[{"id":822010,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/822008\/revisions\/822010"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/816322"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=822008"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=822008"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=822008"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}