MK Party Secretary General Floyd Shivambu has broken his silence on the proposed increase in Value Added Tax (VAT), sharply criticizing the government’s fiscal policies under President Cyril Ramaphosa. In a strongly worded statement, Shivambu condemned the decision to raise VAT from 15% to 17%, arguing that it would disproportionately impact the country’s poor and unemployed.
“Despite rising levels of poverty and unemployment, and rising prices of basic food items and essentials in South Africa under the current administration led by Mr. Ramaphosa, with 12.2 million unemployed people, the fiscal policy has been to increase the tax burden on the poor,” Shivambu said. “The VAT increase from 14% to 15% was under this administration, and so is the proposed increase of the Value Added Tax to 17%. VAT increases are Ramaphosa’s fiscal policies, and no one else’s.”
Despite rising levels of poverty and unemployment, and rising prices of basic food items and essentials in South Africa under the current administration led by Mr. Ramaphosa with 12.2 million unemployed people, the fiscal policy has been to increase the tax burden on the poor.… pic.twitter.com/f59V6O4TOo
— Floyd Shivambu (@FloydShivambu) February 21, 2025
The proposed VAT hike has sparked widespread criticism from opposition parties, civil society groups, and economists, who argue that it will exacerbate the economic hardships faced by millions of South Africans. The country’s unemployment rate remains among the highest in the world, and many citizens are struggling to afford basic necessities as inflation continues to rise.
Economists have noted that VAT increases tend to have a regressive effect, disproportionately affecting lower-income households that spend a larger portion of their income on taxable goods and services. While the National Treasury has defended the proposal as a necessary measure to address budget deficits, critics argue that the government should instead focus on cutting wasteful expenditure and tackling corruption.
The MK Party, led by former President Jacob Zuma, has positioned itself as a vocal opponent of the African National Congress (ANC) and its economic policies. The party has consistently criticized measures it believes disadvantage the working class and the poor, and Shivambu’s remarks reflect this stance.
Shivambu’s comments add to growing pressure on the government to reconsider the VAT hike, with protests and further political pushback expected in the coming weeks. The proposed increase has become a flashpoint in the broader debate about fiscal responsibility, economic inequality, and the government’s priorities.
As the controversy unfolds, the MK Party’s opposition to the VAT hike underscores its commitment to advocating for policies that protect the most vulnerable in society. The government, however, faces the difficult task of balancing the need for revenue generation with the imperative to avoid placing additional burdens on an already struggling population. The outcome of this debate will have significant implications for South Africa’s economic future and the political landscape.
