South Africans are being robbed in broad daylight – not by criminals on the street, but by their own government's fiscal policies. Finance Minister Enoch Godongwana's 2025 Budget Speech wasn't just an exercise in political balancing; it was a masterclass in shifting government failures directly onto ordinary citizens.

While politicians celebrate their "compromise" of a phased 1% VAT hike over two years instead of an immediate 2% increase, the truth remains stark: you will pay more for a crisis you never created.

The National Treasury will raise VAT from 15% to 15.5% on May 1, 2025, and to 16% on April 1, 2026. This threatens to erode consumer purchasing power, stoke inflation, and deter spending. The revised approach does not change the fact that government failures, fiscal mismanagement, and runaway debt are being subsidised by the man on the street.

The hidden tax: bracket creep and silent revenue generation

Instead of pushing through a more considerable VAT increase, Godongwana has ensured all personal income taxpayers will pay more by not adjusting income tax brackets and rebates for inflation. Anyone receiving an inflation-matching salary increase will be pushed into a higher tax bracket and automatically pay more tax.

For the second consecutive year, the income tax table remains unadjusted. This bracket creep significantly impacts retirement fund members.

For example, a member who earned R237 000 in 2024 would have paid personal income tax of R42 660, leaving R194 340 in pocket. With a modest 5% increase in 2025, their income of R248 850 pushes them into the next tax bracket. After deducting R45 773 in taxes, they're left with R203,077 - an effective increase of just 4.5% in take-home pay.

Promises without action: the missing spending cuts

Perhaps more alarming is that despite hiking taxes, Godongwana did not announce significant government spending cuts. Yes, there were promises of spending reviews, but not a single concrete cut to indicate the National Treasury is serious about fiscal discipline.

What makes it worse is SARS Commissioner Edward Kieswetter's statement that no tax hike is necessary, and that SARS can collect hundreds of billions of rand with more resources. This contradiction between Treasury's actions and SARS's assessment raises serious questions about the necessity of increased taxation.

Who really pays for this VAT increase?

A VAT hike is the most regressive form of taxation - disproportionately affecting the poor and middle class. Unlike income tax, which is tiered, VAT applies across the board. Whether you're a CEO or a minimum-wage worker, you'll pay more for daily essentials.

For everyday South Africans, this means higher grocery bills, increased transport costs, more expensive housing and utilities, and small businesses facing tighter margins. The middle class - already shrinking due to economic pressures - will be particularly hard-hit by the combination of VAT increases and bracket creep.

Social grants: a modest increase in the face of rising costs

Due to the lower-than-initially-budgeted VAT increases, social security grants will see modest increases from April 2025. Old age, disability, and care dependency grants increase by R130 (5.9%) to R2 315. The child support grant rises by R30 to R560, while the Covid-19 social relief of distress grant increases to R370 per month and continues until March 2026.

These increases, while necessary, barely keep pace with inflation and do little to address growing economic pressures on the most vulnerable.

Political deadlock: the GNU's budget dilemma

The Government of National Unity now faces a full-blown constitutional crisis as Godongwana's budget has unleashed a political storm. The DA has sought legal advice in apparent preparation for court battles, with the ruling party lacking the parliamentary majority needed for budget adoption.

With the 0.5% VAT increase set for May 1, political tensions have reached fever pitch. The DA has presented the ANC with non-negotiable demands that have been rejected, while surprisingly, the EFF has indicated willingness to help pass the budget - but only if the VAT increase is abandoned entirely.

This creates an impossible balancing act: compromise with the EFF and alienate the DA or stand firm and face legislative gridlock. Meanwhile, taxpayers continue footing the bill for this political theatre. The path ahead promises to be fraught with costly political manoeuvring, with taxpayers inevitably bearing the financial burden of protracted debates where straightforward solutions could have been implemented initially.

Exacerbating this inefficiency was the premature disclosure of the minister's budget speech draft to select organisations and media outlets, who had already mobilised presenters, journalists, economists, and analysts for post-budget commentary. This leak triggered significant financial losses for businesses who invested in preparation for the analysis, while simultaneously inflicting reputational damage and undermining the credibility of government, corporate financial and media institutions.

The government's apparent indifference to these wasteful expenditures reflects a troubling disconnect, as officials continue to operate as though their governance is a favour bestowed upon citizens rather than their fundamental responsibility. When viewed through a business lens, South Africa's fiscal management exhibits such profound irresponsibility that in the private sector, it would have triggered immediate business rescue proceedings - or more realistically, complete organisational collapse. Yet the burden of this administrative incompetence continues to fall on ordinary South Africans.

The bigger picture: no path to economic growth

This budget will not lead to meaningful growth, job creation, or investment. The Treasury's economic outlook remains sluggish with GDP growth projected at just 1.9% in 2025, barely keeping pace with inflation.

Debt service costs will absorb around 22 cents of every rand collected in revenue.If spending cuts aren't enforced and government thinking doesn't change, we'll find ourselves in the same position next year – and taxpayers will once again bear the brunt.

Conclusion: a government that taxes first, fixes later

Make no mistake: what we're witnessing isn't fiscal prudence - it's a nationwide shakedown. While government ministers enjoy luxury vehicles, bloated cabinets, and endless perks, ordinary South Africans are told to tighten their belts yet again.

This budget isn't just disappointing; it's a betrayal of the social contract between government and citizens. The bitter irony is that South Africans are funding the very inefficiencies that created this crisis. We're paying more for less - less service delivery, less economic opportunity, less hope.

Until Treasury finds the courage to slash wasteful expenditure, tackle corruption, and reform failing SOEs, we're watching a slow-motion economic train wreck funded by our own wallets. When future generations look back at this moment, they won't ask why South Africa's economy struggled. They'll ask why we allowed a government to repeatedly punish hardworking citizens while refusing to put its own house in order.

The real deficit in South Africa isn't just financial - it's a deficit of leadership, accountability, and vision. And that, ultimately, is the highest price we're all paying. But the reckoning is coming. Our unemployed millions - especially the youth with their dreams deferred - will not forever accept empty promises while their futures are taxed away.

Their patience grows thinner with each tax hike and broken commitment. Politicians may ignore many things, but they do so at their peril when it comes to this fundamental truth: hunger speaks louder than words. And South Africa's hungry are finding their voice.