Finance Minister Enoch Godongwana. File photo.
In an unprecedented move, the Speaker of Parliament, Thoko Didiza, postponed the 2025 Budget address by Finance Minister Enoch Godongwana to March 12. This decision, the first of its kind, has caused significant concern nationwide.
Jurgen Eckmann, Wealth Manager at Consult by Momentum, remarked, "The postponement of the Budget initially came as a shock, and we quickly saw its immediate impact on markets and the exchange rate. Markets tend to 'spook' easily but it's important to remember that this volatility is generally temporary."
He advised investors not to react emotionally but to consider this an opportunity. "While we may see some short-term sell-offs in the market, this should not be seen as an indicator of sustained or long-term negative sentiment."
The delay, linked to disagreements over a VAT increase, raises questions about other potential tax changes. Finance Minister Godongwana is reportedly considering increasing VAT from 15% to 17%, which could raise around R50 billion annually.
Riaan Grobler, head of advisory services at Everest Wealth, noted that tax revenue collection is expected to fall short by about R10 billion.
South Africa’s taxpayers are already overburdened, with 1.6 million taxpayers contributing over 76% of all personal income tax.
Hwalani Mabaso, head of financial planning, advice and product development at Absa, warned, “If the VAT was to be increased by 2%, it will typically lead to higher prices for goods and services. VAT will drive inflation higher and affect the average consumer’s pocket harder as their purchasing power decreases.”
Grobler emphasised the need for tax relief to stimulate economic growth, adding, "Instead of finding new ways to tax South Africans more heavily, there should be tax relief to stimulate economic growth."
Reuben Coetzer, spokesperson for Free SA, said: "A 31.9% unemployment rate remains a national emergency—far above the global average of 5%."
The Budget Speech delay highlights the need for decisive action to address South Africa’s economic challenges and ensure that fiscal policies support sustainable growth and job creation.
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