For Creamer Media in Johannesburg, I’m Thabi Shomolekae.    

Making headlines: Lower VAT hikes included in delayed Budget that also draws on contingencies to match spending; Political parties reject Godongwana’s Budget; And, Dollar struggles to lift off lows as global trade war ramps up

Lower VAT hikes included in delayed Budget that also draws on contingencies to match spending

Finance Minister Enoch Godongwana tabled his delayed Budget today that included lower, yet still controversial, increases to the value added tax rate, as he sought to hold the fiscal-consolidation line amid rising spending pressures.

The new proposal involves increasing the VAT rate by 0.5 percentage points in 2025/26 to 15.5% and by 0.5 percentage points in 2026/27 to 16%, rather than the immediate two percentage point hike to 17% proposed in the aborted Budget of February 19.

The increases have been coupled to other tax adjustments to help close the revenue shortfall, as well as drawdowns against the contingency reserve that are higher than those outlined in the aborted February 19 Budget.

The other tax measures included no inflationary adjustment to personal income tax brackets, rebates and medical tax credits, as well as above-inflation increases in excise duties on alcohol and tobacco products.

Political parties reject Godongwana’s Budget

Meanwhile, opposition parties have rejected Godongwana’s Budget speech, with the Government of National Unity partner the Democratic Alliance stating outright that it would not support an increases in taxes.

The DA blamed its GNU partner the African National Congress for “sacrificing” South Africans and “risking” the economy with the proposed Budget.

DA leader John Steenhuisen said his party will not support this budget in its current form, vowing to continue fighting for economic growth and jobs.

The Economic Freedom Fighters said that Members of Parliament have the power to not only reject the budget, but to amend it.

The uMkhonto weSizwe Party demanded an immediate shift to an “expansionary People's Budget” that prioritises people over profits.

And, Dollar struggles to lift off lows as global trade war ramps up

The dollar struggled to lift off a five-month low against other major currencies today, as traders digested tit-for-tat US-EU tariffs and a potential Russia-Ukraine ceasefire, while awaiting US inflation data amid worries about the economy.

President Donald Trump's unpredictable announcements on trade policy have whipsawed markets and drawn tariff retaliation from trading partners, ramping up a global trade war.

The European Union will impose counter tariffs on 26-billion euros worth of US goods from April, the European Commission said today, in response to blanket US tariffs on steel and aluminium that came into force earlier in the day.

Europe's single currency has been flying high on the promise of massive fiscal spending by Germany, although the situation has become more complex after the Greens vowed to block those plans and unveiled rival proposals.

That’s a roundup of news making headlines today

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