Godongwana: DA sent letter to Ramaphosa accepting VAT hike in exchange for scrapping of Expropriation Act

CAPE TOWN - Finance Minister Enoch Godongwana said that the Democratic Alliance (DA) has agreed to accept a VAT increase in exchange for the scrapping of the Expropriation Act.

Godongwana revealed this during a joint meeting of Parliament finance committees, where Treasury responded to submissions made during budget public hearings this week.

He said the DA made the offer in a letter to President Cyril Ramaphosa.

The finance minister returned to Parliament to respond to public submissions made on the budget, which includes a 0.5 percent VAT increase for two years.

But his appearance was another indication of the differences within the GNU over the budget. 

He told Friday’s joint meeting that suggestions that the DA didn’t want any increases were incorrect.

"The DA has sent a letter to the president accepting 0.5% in exchange for things that are outside the budget, like the Expropriation Act and so on."

He also said that Treasury was more than happy to interact with Parliament to find common ground on the budget.

"We accept that Parliament has got authority to amend the budget but we would plead that matters be focused on how to make this budget efficient."

The DA said it remains committed to negotiating with its GNU partners, while the Treasury defended the budget and tax proposals, which still have to be adopted by Parliament.