ActionSA has officially informed the ANC that it will not support the 2025/2026 budget that aims to increase value-added tax (VAT) to 17% in the next two financial years.
The party sent a letter to the ANC task team negotiating the budget following a meeting between the two organisations on Friday.
In a statement released by ActionSA parliamentary leader Athol Trollip and ActionSA national chairperson Michael Beaumont, it said while the meeting was cordial, ActionSA stated it cannot back the proposed budget due to planned increases in VAT and income tax.
The party argued that these tax hikes are unacceptable because the government has not addressed its own inefficiencies and wasteful spending.
“In our letter to the ANC, ActionSA conveyed the view that the proposed increases in both VAT and income tax [through income tax bracket creep] cannot be supported for a government that has failed to address its own considerable wastage and inefficiencies,” ActionSA said in the letter.
ActionSA not consulted
It further stated that another key reason for rejecting the budget is that the government of national unity (GNU) did not consult ActionSA while putting together the budget.
ActionSA also emphasised that it cannot approve tax increases to support members of the GNU who claim to oppose the increases but still implement them.
It stated that either a new government must be established or the GNU must obtain enough votes from its own members to approve the budget.
“ActionSA remains committed to being a constructive opposition to an incoherent GNU that is forcing our country into an unprecedented budget and constitutional crisis, leaving spheres of government and organs of state uncertain about their financial allocations.
“ActionSA calls on all parties in the GNU to engage in negotiations with maturity and in the best interest of the country or step aside if they are unwilling to do so.”
