ActionSA leader Herman Mashaba.
Image: Phando Jikelo / Independent Newspapers
ActionSA has formally rejected the African National Congress's (ANC) latest budget proposal, primarily over the contentious issue of a potential Value Added Tax (VAT) hike.
The announcement follows a week of negotiations, during which the ANC sought to persuade ActionSA to support the passage of the 2025/26 budget in light of a standoff within the Government of National Unity (GNU).
"ActionSA has written to the ANC Task Team negotiating the passage of the 2025/26 budget to convey that ActionSA will not support the budget," the party said.
The two parties met last week Friday where the ANC was trying to persuade ActionSA to join its efforts in securing the passage of the budget after an impasse within the Government of National Unity (GNU).
On Monday, IOL reported that ActionSA said it was frustrating the ANC was only now engaging in talks with parties outside the GNU over the budget
In the letter, ActionSA told the ANC that "the proposed increases in both VAT and income tax (through income tax bracket creep) cannot be supported for a government that has failed to address its own considerable wastage and inefficiencies."
"Central to our decision is the reality that this budget arises from a GNU that did not consult ActionSA in the development of the proposed budget.
"ActionSA cannot impose tax increases on South Africans to support those in the GNU who are notionally opposed to these increases, yet continue implementing them at the expense of South Africans".
Earlier this month, Finance Minister Enoch Godongwana tabled the budget after a long battle of postponement and negotiations.
Godongwana announced a 0.5% VAT increase in the 2025/2026 and another 0.5 % increase for the 2026/2027 financial years. This brings the VAT to 16%.
Meanwhile, the Democratic Alliance (DA) said it would not support the national budget and any increase in the VAT unless they were temporarily introduced.
Furthermore, ActionSA told the ANC that either the votes to approve this budget must come from the parties within the GNU, or a new government capable of passing a budget must be constituted.
ActionSA stated that it would remain in constructive opposition to an incoherent GNU that is forcing our country into an unprecedented budget and constitutional crisis, leaving spheres of government and organs of state uncertain about their financial allocations.
The party also called on all parties in the GNU to engage in negotiations with maturity and the best interests of the country or step aside if they are unwilling to do so.
IOL Politics