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22 April 2025 | Story Terrance Molobela | Photo Supplied
Terrance Molobela
Terrance Molobela is a Lecturer in the UFS Department of Public Administration and Management.

Opinion article by Terrance Molobela, Lecturer in the Department of Public Administration and Management, University of the Free State.

 


 

Despite fierce opposition of the already passed National Fiscal Framework, the African National Congress (ANC) convened several meetings within and outside the Government of National Unity (GNU) mostly pioneered by its Secretary-General Fikile Mbalula who recently stated: “We are not trickers; we do not trick people. We engaged with ActionSA, and they said they do not want VAT; that’s not tricking anyone.”

One thing is clear, there is nothing binding on the GNU that after receiving additional budget proposals to raise revenue from ActionSA and Building One South Africa (BOSA), the VAT hike will be dropped. In fact, on 16 April 2025 in an interview with Newzroom Afrika the Minister of Finance Enoch Godongwana said: “I am not married to any increase or percentages”. The minister pointed out that the initial budget without VAT hikes was still on the table, however, he further highlighted that VAT increases remain Parliamentary policy issues. His advice is: “If you remove the 0.5% VAT increase, you must find an equivalent amount on the expenditure side to ensure the fiscal framework remains balanced.”

As the budget impasse stands, people need to understand that once the budget is passed by Parliament, the minister cannot unilaterally reverse the VAT increase. This is cemented by Section 12 of the Public Finance Management Act and Section 7(4) of the VAT Act. This ball is in Parliament’s court to reverse the budget and revenue proposal once alternative revenue generation proposal have been brought forward.

With 1 May 2025 looming, South Africans have a bitter pill to swallow as they will be charged R15.50% for every R100 spent. The media covered the VAT increase with rage and concerns from various communities across the country. The people feel punished by the GNU, while facing deep-rooted socio-economic problems like inequality, high unemployment, and poverty.

Despite the GNU deadlock and its fiscal crisis, several members within the ANC have unanimously admitted that the party has grossly failed to reach an amicable consensus within the GNU to freely support the VAT hike, hence it is vehemently opposed from all sides. Some critics suggest that the ANC-led government is poised to drop the VAT hike, but it’s unclear as to where and how the minister of finance would find the money to plug the fiscal gap.

 

Marriage may be sweet, but divorce is bitter

Both the ANC and DA knew ahead of time that forming the GNU with other parties was what is commonly known as “a marriage of inconvenience”. Before and on the wedding day, you both blind yourselves because of the sweet cake, joy, guests, and presents that long-lost friends will bring along. You create this beautiful picture that only exists in your head and hope that the other party shares a similar picture. But after you have entered the marriage, you then realise that you each functions on different levels and do not have complementary ideologies.

The DA’s ideologies on governance and policy is far the opposite of the ANC, and although it could work, the ANC have demonstrated their thirst for power and control, hence, their ability to share power equally remains a foreign language. DA leader John Steenhuisen has made it clear that they will not sacrifice citizens’ votes for a piece of cake but would rather fight and support a budget that caters for economic growth and job creation. This they have demonstrated by challenging the legality of the budget process in court, with hopes of blocking the implementation of a VAT increase, which has led to widening the rift within the fragile GNU.

 

The authenticity of the parliament – flawed budget process?

Amid mounting tensions created by the budget impasse, the National Assembly narrowly facilitated the national budget process, the DA, Economic Freedom Fighters (EFF), and uMkhonto weSizwe (MK) party rejected the budget, whilst the ANC-led government through coalescing outside GNU with parties like Action SA, secured majority support for the approval of the fiscal framework.

Parliament passed the 2025 National Fiscal Framework without the formal amendment of the mounting VAT and tax hikes. This was approved without binding recommendations, although budget committees suggested that the VAT and tax hikes be reconsidered at a later stage. As 1 May 2025 approaches for the VAT hike to kick in, reversing the VAT increase would be a lengthy process because it appears untenable.

The DA leader raised concerns that the Finance Committee acted ultra vires of the standing rules of Parliament, meaning the budget was not properly presented to the committee to reject or approve it, and that only a single proposal from the ANC was prioritised, whilst neglecting the DA proposal. This legal anomaly occurred under the watch of the National Assembly on the 2 April 2025. Hence, the DA have been challenging the budget.

One would ponder – “if the tables were turned, and the DA was in the position of the ANC and visa-versa, would the National Assembly opted to approve the budget framework?” I guess we would never know.

 

Where does the road lead now?

GNU: the ANC has already held several talks and meetings indirectly citing that the DA should hand over their divorce papers. But the president of the ANC needs the DA to remain in the coalition because of further economic shocks, which saw R1 trillion wiped out on the Johannesburg Stock Exchange (JSE). Investor confidence in the economy has hit rock-bottom, and the current trade wars have put pressure on multiple businesses to tighten their investment belts until it is safe to continue investing. The DA has not yet declared whether they want a divorce, but critics suggest that the Deputy President, Paul Mashatile, would be delighted if the DA left since they rejected the very same budget that they expect to reap from. As for ActionSA, it is unclear whether they have decided to join the GNU, but its leader Herman Mashaba has shown interest in joining the GNU, which most critics have weighed as a betrayal to the people of South Africa.

Ordinary citizens: It is time for South Africa’s citizens to brace themselves for the oncoming VAT hike. As much as the minister of finance has argued that it was necessary to stretch the already deeply embedded financial distress of citizens grappling with over-taxation of income, the bitter pill remains theirs to swallow. The 0.5% in VAT carries an underestimated distress for households who will be left alone to deal with increased prices of goods, services, and essentials.

 

What should be done thus far?

More tax on the people, goods and services kills jobs, which results in reducing revenue generation by government. To avoid further inflationary hikes, the government needs to approach the problem in an unusual way – this means placing strict rules and regulations on any government transaction that takes effect, deal with corruption and mismanagement at every sphere of government. Monies lost and stolen through unfinished projects should be recovered and ensuring that all state projects remain frequently monitored.

The government needs to change its ways of approaching industries, companies, and businesses to create jobs, and transfer some of their skills to the people of South Africa. The youth is yearning to be seen, supported, trained, and placed into the real world to unleash their potential, which might be something the economy needs to re-establish and position itself in the right direction to stir desired economic growth.

 

News Archive

Significant support for Student Safety March in Bloemfontein
2017-07-28

 Description: Student Safety March Prof Petersen Tags: Student Safety March Prof Petersen 

SK Luwaca, UFS SRC President; Thapelo Ngozo,
CUT SRC President, and Prof Francis Petersen,
UFS Rector and Vice-Chancellor, during the handover of the
memorandum at the Bram Fischer Building.
Photo: Johan Roux

The University of the Free State (UFS) and the Central University of Technology (CUT) united in a Student Safety Awareness March, which took place on Thursday 27 July 2017 from the UFS Bloemfontein Campus to the Bram Fischer Building.

The peaceful march had a turnout of approximately 1 500 students and staff from both institutions, led by the Student Representative Councils (SRC) from UFS and CUT. The purpose of the march was to hand over a memorandum to the Provincial Commissioner, Lieutenant General Lebeoana Tsumane, who acknowledged it on behalf of Mr Sam Mashinini, MEC for Police, Roads, and Transport in the Free State. The memorandum includes students’ demands regarding safety around student residential areas and general student safety in the city.

Prof Francis Petersen, UFS Rector and Vice-Chancellor, who – together with other members of the senior leadership group – was part of the march, says he is very impressed with the outcome of the march and the participation rate of both staff and students, as well as the joint efforts between the UFS and CUT to arrange the march.

Prof Petersen says, “There are public spaces where our students feel unsafe, and we would like the city and the province to seriously look into that and work with us to try and see if we could make those spaces safe.

A week filled with safety activities
The march was part of the Safety Week taking place from 24 to 28 July 2017, during which the UFS SRC, together with other stakeholders, took part in several activities on and off the Bloemfontein Campus. These included door-to-door visits to student homes and residences on and around campus, awareness campaigns at all the gates of the campus, and a Safety Dialogue held on 26 July 2017 at the Equitas Auditorium on campus.

The aim of the Safety Week was to focus on informing, educating, and encouraging students as well as the Mangaung community at large, to work together in creating a safe environment for students. The week started with the roll-out of an awareness campaign titled Reach Out, which was set to bring students and the community of Mangaung together to help decrease the number of violent crimes faced by students off campus. The communication plan included safety messages, using outdoor billboards, posters on lampposts around the residential student areas, local community radio stations, campus media, and the university’s social media platforms.

 Description: Student Safety March  Tags: Student Safety March  

UFS and CUT students and staff, occupying the streets of
Bloemfontein during the Safety March.
Photo: Johan Roux

Accreditation of off-campus accommodation service providers
Over and above the Safety Week and safety awareness march, the university has initiated a number of other projects as part of its student safety strategy. This includes a process to accredit off-campus accommodation service providers in Bloemfontein who provide accommodation to students. The decision to accredit these service providers comes from a concern by the university management about the safety of students and the conditions under which some of our students live in off-campus accommodation. The accreditation process entails a list of primary requirements, drafted with the cognisance of the Mangaung Metropolitan Municipality and the SRC, in terms of off-campus accommodation to which private providers must adhere in order to be accredited by the university. The requirements are in line with the Policy on the Minimum Norms and Standards for Student Housing at Public Universities (Government Gazette 39238, dated 29 September 2015).

Transport to and from campus
Another project to be initiated on 31 July 2017 is a transport pilot project with Interstate Bus Lines to assist students with transport and access to the Bloemfontein Campus. The route includes various stops in the areas surrounding the campus, as well as a hop-on/hop-off route within the campus.


Released by:

Lacea Loader (Director: Communication and Brand Management)
Telephone: +27 51 401 2584 | +27 83 645 2454
Email: news@ufs.ac.za | loaderl@ufs.ac.za
Fax: +27 51 444 6393


 

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