South Africa’s Budget Battle Deepens as Coalition Divisions Widen

• Political deadlock over VAT hike threatens Government of National Unity
• Investors await clarity as economic uncertainty fuels market volatility

Johannesburg, South Africa – South Africa’s Finance Minister Enoch Godongwana’s national budget has exposed deep divisions within the Government of National Unity (GNU), with coalition partners, opposition parties, and civil society rejecting proposed tax hikes. The most contentious measure is a planned 0.5 percentage point increase in value-added tax (VAT) in 2025/26, followed by a similar rise in 2026/27—though the second hike may be reconsidered if alternative revenue-raising measures prove effective.