EFF warns Godongwana against tax increases in budget
The Economic Freedom Fighters has warned that any tax increase in Wednesday’s national budget could trigger instability.
Speaking ahead of Finance Minister Enoch Godongwana’s tabling of the 2026 budget in the National Assembly, EFF spokesperson Thembi Msane urged the government not to raise VAT and to implement a wealth tax in line with inflation instead of taxing the poor with added tax.
This comes amid debates around taxing high-net-worth individuals to combat inequality, with proposals focusing on restructuring existing taxes:
“What we expect to see is that he must then make sure that the income tax bracket is adjusted, because it's not in line with the inflation rate,” Msane said.
At the same time, the EFF has renewed calls for Godongwana to resign ahead of the budget speech in Cape Town.
Msane cited low economic growth and unemployment above 40 per cent, particularly among youth.
Msane says the EFF wants increased infrastructure investment, a review of the equitable share model, and clarity on election funding allocations from Godogwana on Wednesday.
“The equitable share model is not working. The issue of water, the issue of infrastructure, is because of this equitable share model that they are using? The current employment rate is above 40%. How are we going to be funding the elections?”
Meanwhile, an economist believes the Finance Minister will hold the line on taxes in the latest budget.
Professor André Roux from the Stellenbosch Business School says that with local government elections on the horizon, Minister Enoch Godongwana is likely to avoid any unpleasant tax shocks.
Godongwana is expected to outline the government’s financial, economic and social commitments for 2026 when he addresses the National Assembly in Cape Town.
Roux says he expects this year’s budget process to be more inclusive and transparent, despite lingering concerns.
“We start the year with a remarkably high gold price. The rand (to US dollar) exchange rate is at its strongest level in probably five or six years, inflation is heading towards 3%, and interest rates are being managed downwards. We add to that the fact that a few months ago, Standard and Poor's gave us a slightly more positive credit rating, and we'd been removed from the so-called grey list."
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