ANC secretary-general Fikile Mbalula says the DA remains a coalition partner, VAT hike tensions.
Image: Timothy Bernard / Independent Newspapers
The African National Congress (ANC) National Working Committee (NWC) has decided to maintain its working relationship with the Democratic Alliance (DA) within the Government of National Unity (GNU).
The decision to raise VAT by 0.5% has ignited considerable backlash, particularly among opposition parties.
The DA has condemned the hike, arguing that it disproportionately burdens low-income individuals and the working class, exacerbating existing economic inequalities.
The DA has initiated legal proceedings to contest the VAT increase in response to what they view as an injustice.
ANC's stance on coalition
During a media briefing on Tuesday, ANC secretary-general Fikile Mbalula announced the decision to continue the coalition with the DA.
Despite opposing the VAT increase, the DA has publicly reaffirmed its commitment to the alliance.
Analysing the political landscape
Political analysts suggest that this partnership resembles a 'marriage of inconvenience', with the ANC reliant on the DA for stability in governance.
They argued that the DA seeks to leverage its position to demonstrate its effectiveness compared to the ANC.
Independent political analyst Professor Sipho Seepe commented, “The ANC is in the marriage for the sake of being in office. It is directionless and only follows the dictates of businesses invested in the Ramaphosa presidency. On the other hand, the DA has a worked-out plan to deliver the carcass of the ANC to the electorate.”
Seepe warned that the political landscape surrounding the VAT hike is fraught with tension and that any move to expel the DA from the GNU could provoke retaliatory actions, including threats from the DA to pursue investigations into alleged financial misconduct associated with President Cyril Ramaphosa's Phala Phala scandal.
Concerns over political alliances
Dr Metji Makgoba, an independent analyst and senior lecturer at the University of Limpopo, echoed similar sentiments.
He argued, “The emerging differences between the DA and ANC have disappointed capital interests in South Africa, revealing the deep cracks within their fragile neoliberal alliance.”
He emphasised that the situation may serve as a wake-up call for political leaders to realign their agendas towards genuine representation and accountability rather than merely catering to capital interests.
Parliamentary vote dynamics
In the parliamentary vote regarding the VAT hike, the ANC and its allies supported the increase. At the same time, the DA, along with the Economic Freedom Fighters (EFF), the uMkhonto weSizwe (MK) party, and the Freedom Front Plus (FF Plus), opposed it.
The ANC's majority enabled the passage of the VAT increase with the help of ActionSA, IFP, BOSA, and other smaller parties.
Future implications and agreements
Opposition parties have vowed to continue their fight against what they view as a regressive tax policy, and the DA's court case will unfold in the coming weeks.
If the court rules in its favour, implementing the VAT hike could be delayed.
Meanwhile, following an agreement with ActionSA to support the 2025 Budget, the ANC acknowledged the Treasury's challenges in finding alternatives to reverse the VAT increase.
This agreement stipulates that the VAT increase would be scrapped within 30 days and includes inflation adjustments for personal income tax to prevent bracket creep.
thabo.makwakwa@inl.co.za
IOL POLITICS
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