Budget 3.0: Economists speculate Godongwana could lift freeze on fuel levy

CAPE TOWN - After a rocky three months of political contestation, Finance Minister Enoch Godongwana is expected to deliver a very muted budget on Wednesday afternoon.

With a legal battle on the value-added tax (VAT) Act still to enter a second round, no surprise moves are expected in this third version of the budget 2025.

But without a VAT increase, just how does Godongwana plan to fund the country’s expenditure?

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After political high drama in February that led to the budget tabling being called off at the eleventh hour, Godongwana will be looking to retain the key elements of the March budget without leaving frontline services in the lurch.

But he will have to achieve this without his previously proposed VAT increase of zero point five percentage points.

The National Treasury is under pressure from the Democratic Alliance to accelerate spending reviews to find billions of rands that political parties believe are lying wasted in departmental budgets.

Economists speculate Godongwana could lift the freeze on the fuel levy, but he’s unlikely to tinker with personal and corporate income tax.

With the revenue service in line for a major cash injection, expectations are that it will have to prove its worth it, by bolstering its collections.