Increasing taxes is not the solution Minister Godongwana

Issued by Dr Dion George MP – DA Shadow Minister of Finance
02 Nov 2023 in News

Note to editors: Please find attached soundbite by Dr Dion George MP

In a briefing following yesterday’s Medium-Term Budget Policy Statement (MTBPS), Minister of Finance, Enoch Godongwana, refrained from providing definitive answers about potential tax hikes in the 2024 financial year. While he claims it’s premature to discuss taxes ahead of the 2024 National Budget, the absence of a concrete response suggests possible taxation increases are on their way.

His evasiveness is set against a backdrop of a widening budget deficit which can be attributed to, amongst other things, unexpected expenditures that include a bloated public sector wage bill and stunted economic growth. Operational inefficiencies in and continued bailouts to state-owned enterprises (SOEs), notably Eskom and Transnet, amplify these financial pressures.

The Democratic Alliance (DA) is therefore deeply concerned about the looming uncertainty the Minister’s ambiguity has fostered. But it must be clear. The DA will categorically oppose the implementation of any additional taxes or increment in tax rates, as it would only serve to further impede economic growth, discourage investment and savings, and put more pressure on South African households battling to put enough food on their tables in a worsening cost of living crisis. The cost of living was not mentioned once in the Minster’s speech – an indication of an out-of-touch Government that does not care.

The South African economy is already beset with one of the most onerous tax regimes in the world. The ANC’s proposed tax hikes display a blatant disregard for the well-being of South Africans. It’s not that diligent South Africans aren’t contributing enough; it is that the ANC government is chronically inefficient and acts as a wealth extractor rather than a growth stimulator.

Should the ANC government impose increased taxation, it will encounter massive resistance as taxpayers have grown increasingly wary of this government’s propensity to squander their hard-earned money.

Instead of levying new taxes, the Minister should heed the recommendations presented in the DA’s Alternative MTBPS presented earlier this week. Our proposals emphasise prudent expenditure management which eliminates the need for any tax increases. In fact, their sufficient space for a reduction in taxation on fuel and for the expansion of the zero-VAT-rated food basket.

The Minister’s reluctance to provide clarity is another indication that the ANC government does not care about South Africans who are feeling increasingly vulnerable as food insecurity mounts.

The ANC government is incompetent, incapable, and corrupt. It has positioned itself in the wrong place in our economy. This year’s MTBPS failed to address the urgent economic crisis facing South Africa. The DA’s alternative set out what is possible if the Minister was in fact bold, but he certainly was not and missed an opportunity to set us on the path to a sustainable economic recovery.

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