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03 Apr, 2025
UDM sets the record straight on its position on 2025/2026 Budget Fiscal Framework
Statement by Nqabayomzi Kwankwa, UDM Deputy President and Leader in Parliament The United Democratic Movement (UDM) firmly refutes the misconception being propagated in the media and on social media that it voted in favour of the 0.5-percentage-point VAT hike. This claim is entirely false and misrepresents the Party’s stance on the matter. The UDM voted for the 2025/2026 Budget Fiscal Framework with the strict proviso that “the Minister of Finance facilitates the receipt of substitute revenue proposals from the committee, together with corresponding expenditure savings, that will form the basis of an alternative revenue proposal instead of the proposed 0.5 percentage point increase in VAT for the 2025/26 financial year, effective 1 May 2025, in respect of which the committee has expressed serious concerns.” as articulated in Paragraph 6.29 of the “Report of the Standing Committee on Finance on the 2025 Fiscal Framework And Revenue Proposals, dated 01 April 2025”. The UDM furthermore took into consideration Paragraph 6.30 of the same document which reads: “…the committee recommends that the alternative revenue proposals and expenditure savings to balance the R28 billion shortfall which must effectively suspend the proposed increases be finalised and submitted by the committee to process within 30 days for consideration and adoption of this report by the house.” The UDM advocates for a pragmatic approach to South Africa’s economy, emphasising the urgent need to balance the books - something that is not happening at present. The government cannot afford to suspend critical social welfare programmes like the Special COVID-19 Social Relief of Distress (SRD) grant, yet it also cannot afford them without securing additional funding. While tax hikes are vastly unpopular, the reality is that the R28 billion shortfall must be addressed to keep essential programmes running.
