IFP says VAT increase is a short-term intervention and urges National Treasury to urgently find alternative revenue solutions.
Image: Facebook/IFP
The Inkatha Freedom Party (IFP) said while the VAT increase is a short-term intervention, the government must urgently seek alternative revenue sources to cushion the impact on South African consumers.
This comes after a high-level meeting between the IFP and the African National Congress (ANC) on Thursday, in Johannesburg to address the ongoing budget impasse within the Government of National Unity (GNU).
IOL previously reported that IFP was among the political parties that voted in favour of the 0.5 % Value Added Tax (VAT) and the passing of the 2025 fiscal framework while parties like the Democratic Alliance (DA), Economic Freedom Fighters (EFF), and the uMkhonto weSizwe Party (MK Party) voted against it.
Led by IFP president Velenkosini Hlabisa and ANC Secretary General Fikile Mbalula, the two parties discussed critical fiscal matters, including the revised national budget and the country’s constrained economic environment.
In a joint statement, both parties reaffirmed their support for the revised budget presented by the National Treasury and processed by the National Assembly, describing it as "fundamentally pro-poor." The budget includes measures such as the expansion of zero-rated VAT items to protect low-income households.
Addressing concerns around the VAT hike, the parties emphasised it is a temporary measure.
"The parties affirm that the VAT increase is a temporary short-term intervention and agreed that the National Treasury must urgently explore alternative revenue-generation strategies to mitigate the impact of this marginal increase on consumers," the statement said.
Both parties dismissed further government borrowing as a viable solution, noting that current debt levels provide little flexibility for such an approach. They reiterated their commitment to the Government of National Unity (GNU), recognising it as crucial for maintaining national stability, fostering economic growth, and promoting long-term development.
The IFP also highlighted its commitment to strengthening cooperation and consensus-building within the GNU, with national spokesperson Mkhuleko Hlengwa stating the party “is committed to strengthening cooperation and consensus-building within the GNU to effectively address national challenges.”
Another key issue on the agenda was the future of Ithala Bank, with both the ANC and IFP agreeing on a bipartisan process to safeguard the institution, which plays a vital role in financial inclusion for historically disadvantaged communities.
IFP confirmed it will meet with the DA on April 13, as part of its broader efforts to build consensus in the national interest.
Speaking at Chris Hani's 32nd anniversary commemoration, Deputy president Paul Mashatile highlighted the ANC's decision to reconfigure the alliance, a move intended to bring more parties into the fold to strengthen the GNU.
"The leadership of the ANC, after what has happened recently, decided that we are going to reconfigure the alliance.
"We are going to reconfigure the GNU to ensure that we bring other parties on board, work with us, but also to ensure that we discuss this properly with all the parties," Mashatile said.
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