Finance minister Enoch Godongwana has been summoned to Luthuli House to present his finalised proposal on the budget. Godongwana was expected to meet the ANC's top officials on Monday afternoon, insiders said.
ANC insiders said Godongwana was likely to lobby the ANC’s top brass to approve his budget proposal, which will be presented to its GNU partners after this meeting.
ANC spokesperson Mahlengi Bhengu could not be reached for comment.
The Treasury has just two days to finalise a budget after a weeks-long stalemate in President Cyril Ramaphosa’s cabinet.
During a national working committee meeting in the Free State this weekend, insiders said Ramaphosa expressed confidence that an agreement would be reached in time for Wednesday’s budget speech.
Godongwana cancelled the tabling of the budget in February just minutes before he was meant to appear in parliament. The Cabinet had rejected his proposal of a two percentage point increase in VAT.
The ANC is said to be “warming up” to a VAT increase of half a percentage point. One insider said the party would probably “shop” for support outside the GNU should the DA reject another proposal by the Treasury.
The insider said they believed the EFF could be convinced to support the budget “if compromises are made”.
Sunday Times reported this week that Godongwana was standing his ground on a tax increase, insisting he needed the extra revenue to fund the “Covid-19 grant” and ruling out any other form of a tax hike.
The report stated that less than one percentage point, possibly half, would be proposed, according to insiders. This would be followed by similar-sized hikes in the next two years.
A two percentage point VAT increase would have raised an additional R60bn. The Treasury has budgeted R35bn in 2025/26 as an addition to the baseline to fund the grant introduced at the height of the Covid-19 lockdowns but has not made provision for it for the two outer financial years.
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