DA Opposes Tax Hikes, Calls For Fiscal Responsibility In 2025 Budget

Democratic Alliance (DA) opposes tax hikes likewise calling for political will, rather than increased taxes or additional borrowing, to address South Africa’s fiscal challenges as the 2025 budget looms.

Finance Minister Enoch Godongwana was forced to delay his budget speech after a proposed 2% increase in value-added tax (VAT) met resistance from political parties within the Government of National Unity (GNU). Originally scheduled for last week, the speech is now set for 12 March, as Cabinet continues discussions on alternative fiscal strategies.

During a media briefing on Tuesday, DA national spokesperson Karabo Khakhau warned that raising taxes and debt would stifle economic growth and job creation.

“A 2% VAT hike is not ridiculous, but it is anti-poor and anti-middle class,” she stated. “We want an anti-tax, pro-jobs, and pro-growth national budget.”

DA MP Mark Burke outlined the party’s six key budget proposals, emphasizing that responsible fiscal management could prevent tax hikes while ensuring essential services are maintained.

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Burke pointed out that the R60 billion in new expenditure the National Treasury needed to accommodate accounted for just 3% of the overall R1.9 trillion budget. Also argued that this amount could be “easily sourced from failing, failed, and underperforming programmes and sub-programmes.”

“South Africa doesn’t have a revenue problem; it has a problem prioritising spending on programmes that drive growth and, in turn, job creation,” Burke asserted.

DA proposes several cost-cutting measures like a33% reduction in travel and catering expenses across government departments, 12-month hiring freeze on all non-essential government positions, national audit of ‘ghost employees’ to eliminate fraudulent salaries.

Others, fast-tracking logistics and trade reforms, including setting deadlines for freight rail and major port concessions, and a three-month emergency spending review to identify and eliminate wasteful programmes, potentially freeing up R58 billion.

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“This will allow the reallocation of funds to essential public services such as healthcare, policing, and education,” Burke said. “It will also ensure that legally mandated commitments, like the R7 billion public sector wage increase, can be covered without tax hikes.”

Additionally, the DA proposes using adjustment budgets throughout the year to reallocate funds as inefficiencies are identified.

Instead of raising taxes, Burke suggested that South Africa should focus on improving tax compliance and unlocking underutilised state assets as increasing tax compliance from 63% to 67% could generate an additional R60 billion annually, selling under-utilised government land could raise an estimated R10 billion per year.

Furthermore, DA rejected claims that its proposals amounted to austerity, arguing that inefficiencies and corruption were the real drains on the national budget. “We all know how much fat, inefficiency, corruption, and maladministration is baked into our current governance system,” Burke said.

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Burke again, argued that public wage increases must be scrutinised, stating that “bad practices,” such as automatic salary increments for long-serving state employees, are unsustainable.

“There’s all sorts of bad practice that’s become entrenched over time, leading to above-inflation wage increases year after year. It’s ruining our fiscal strategy,” he said.

Democratic Alliance’s (DA) proposals seek to stabilise South Africa’s finances without placing additional burdens on taxpayers, positioning the party as a pro-growth alternative to the government’s current approach.

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