However, a significant aspect of the budget, an increase in value-added tax (VAT), remains contentious. Multiple parties in the coalition government are against the rise, arguing it will negatively impact the poor.

“The government suggests raising the VAT rate by half a percentage point in 2025/26 and by another half a percentage point in 2026/27. This will raise the VAT rate to 16 per cent by 2026/27,” announced Godongwana.

Although this proposal is half of what was suggested three weeks prior, it has still been met with opposition from various parties.

The budget also features a slightly improved growth forecast, a reduced fiscal deficit, and increased spending on infrastructure among its key points.

“While the discussion around the proposed VAT increase has been intense, the greater discussion should center on how we boost the economy for the benefit of all South Africans,” stated Godongwana.

“A larger, faster-growing economy, and the additional fiscal resources it brings, would give us more room to achieve our developmental objectives. Unfortunately, our economy has not grown for over a decade,” he added.

Differences among coalition parties mean that Godongwana will require support from a wide range of political parties to approve the revised budget.

The second-largest party in the coalition, the Democratic Alliance, opposes tax hikes and is advocating for a complete overhaul of government spending.

The budget serves as the most significant test for the fractious coalition government, established after the African National Congress (ANC) failed to secure a parliamentary majority for the first time since the end of apartheid in 1994.

The final vote on the budget is expected towards the end of May.