Godongwana's VAT reversal plunges parliamentary programme into turmoil

Finance Minister Enoch Godongwana’s decision to reverse the 0.5% VAT increase in the 2025-26 budget and to withdraw the Revenue and Appropriations Bills has plunged the programme of Parliament into disarray.

The announcement has raised alarm among opposition parties and sparked potential legal action from the MK Party if the fiscal framework containing VAT increase was not sent back to the standing committee on finance.

On Thursday, National Assembly Speaker, Thoko Didiza, told MPs that her office has been made aware of Godongwana’s intention to introduce a VAT rate and amendments to the Revenue Bill that will propose retaining the current VAT amount instead of an increased amount announced in March.

“The minister will withdraw the Division of Revenue and Appropriations Bills in order to propose expenditure adjustments. It is expected that the minister will introduce new bills in the forthcoming weeks,” said Didiza in a statement read by House chairperson Cedric Frolick during the meeting of the National Assembly Programme Committee.

Didiza said the development would definitely have obvious consequences for Parliament and the programme of the National Assembly.

“The effect of this is the review of the parliamentary programme as it currently stands. Once more details are obtained the whips will meet, followed by programme committee where a revised programme will be put up for consideration by members of the programme committee,” she said.

When the programme was up for discussion, ANC MP and programme whip, Cameron Dugmore, noted that the turn of events would have serious amendments to the parliamentary programme.

“In terms of dealing with details of the programme now in this meeting, given we need to get points of clarity and also opportunity as parties to engage on the matter, I want to ask guidance whether I should proceed with the programme as it is,” he said.

“It does not include the possible amendments. It was developed without reality of amended fiscal framework. I propose we don’t go to this programme but engage at chief whips forum and next Thursday propose to Speaker to convene the programme committee again,” Dugmore said.

MK Party MP, Visvin Reddy, agreed with Dugmore.

Reddy said apart from the bills to be withdrawn, the fiscal framework that contained the VAT increase has been withdrawn too.

“If not done legally sound, we as the party will take this matter to court. We are not a spaza shop operation,” Reddy said.

Frolick said there were a number things that will change on the programme.

“As soon as further information becomes available from the minister of finance on withdrawal and tabling of new budget instruments, it will immediately be communicated and the chief whip forum and finally National Assembly Programme Committee will reflect on that,” he said.

Frolick also said the scheduled vote of the Division of Revenue Bill on May 6 will fall off.

“The intention of the minister and the letter we received is quite clear, the item will not be proceeded with,” Frolick added.

However, EFF MP Hlengiwe Mkhaliphi said the chief whip's forum meeting to be held next Wednesday was too far and the meeting on Wednesday had anticipated a change to the programme after the court made a ruling next week.

“Let’s meet as soon as possible even if it is tomorrow,” she said.

Mkhaliphi said the saga could have been avoided had the letter her party complaining about the irregularities in the adoption of the fiscal framework by the standing committee was considered.

Her colleague Natasha Ntlangwini said Godongwana could not just announce the withdrawal of the bills.

“It ought to come to Parliament to do the reversal. The minister can’t say ‘I reverse’. It can’t happen. It must come and only Parliament reevaluate the decision it has taken, not the minister at Union Buildings,” she said.

Ntlangwini raised concern about the change to the programme on other business of Parliament such as the oral questions to Deputy President Paul Mashatile and debates to be discussed.

ANC chief whip, Mdumiseni Ntuli, said the current programme should be re-affirmed until Didiza advised on the implications of Godongwana.

“We will reflect what is required on our part to take intervention on board. It was Parliament that voted on 2 April to adopt the fiscal framework that within 30 days,” Ntuli said.

He also said Parliament should wait for a report from the leader of Government Business, Mashatile, and Didiza on practical implications of the statement made by Godongwana and how to accommodate the process in the programme.

Frolick said apart from the budget, there was other work Parliament should attend to.

“The programme for the next two weeks is confirmed. The item on the Division of Revenue Bill on May 6 falls off,” he said.

Mkhaliphi’s push for an urgent meeting to consider parliamentary programme fell on deaf ears.

“We have powers as MPs and programme committee must convene an urgent meeting,” she said, adding it was not acceptable to pretend everything was fine when there was no budget.

But Frolick said Didiza treated the matter with the necessary seriousness. “She will as soon as she has relevant information to share,” he said.

mayibongwe.maqhina@inl.co.za