‘There won’t be a VAT increase because of MK Party’: Shivambu claims credit, calls for Godongwana’s resignation

MK Party (MKP) secretary-general Floyd Shivambu has taken credit for the reversal of the proposed value added tax (VAT) hike, saying “there won't be a VAT increase because of the MK Party". 

On Thursday, finance minister Enoch Godongwana announced the contentious hike has been scrapped after extensive consultations with political parties and parliamentary committee recommendations.

Speaking to supporters on the sidelines of MKP leader Jacob Zuma's court case in Pietermaritzburg on Thursday, Shivambu said: “It's only the MK Party that went to the streets to reject the VAT increase. There is no other political party that went to march against the increase.”

The proposed VAT hike was opposed by several political parties. The DA and EFF challenged it in court while other parties, including ActionSA, Build One SA and the IFP, engaged with the ANC to find alternative solutions to raise revenue.

“When others were trying to discuss VAT in court and in parliament it's only us who went to the ground to reject the VAT increase because we know you cannot win in the courts or in the boardrooms what you have not won on the ground,” Shivambu said.

He called for Godongwana's immediate resignation, accusing him of attempting to maul the working class and poor people with the VAT hike.

“He must step down with immediate effect. We cannot continue to be led by people who do not have ideas on what to do with this country.”

The MKP is not the only party claiming credit for the VAT increase reversal.

Build One SA leader Mmusi Maimane praised the negotiations with the ANC, saying they led to the decision to scrap the VAT hike. “When we voted in support of the fiscal framework, misinformation campaigns came at us fast and loud. But we didn’t waver,” Maimane said. 

“We knew responsible negotiations around the table were the best way to find agreement to stop the proposed 0.5% percentage-point VAT increase, and today that’s exactly what’s happened.”

The DA also believes the reversal was a result of its opposition to the tax increase. The party challenged the process by filing an urgent application in the Western Cape high court to contest the constitutionality of the increase and procedural flaws in tabling it.

“From the outset, the DA has opposed the tax increase, highlighting its impact on struggling South African households,” said DA federal chair Helen Zille.

“This exposed the arbitrary power the minister of finance sought to wield in imposing the VAT hike. The approach by lawyers acting on behalf of the minister with a proposal for an out of court settlement to scrap the VAT hike marks a critical turning point in the battle. It is clear the Treasury had no choice but to reverse its decision in the face of our relentless and strategic legal pressure.”

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