South Africa's national budget was postponed on Wednesday because the two biggest parties in the ruling coalition disagreed over raising value-added tax, an unprecedented delay that caused the rand and government bonds to fall.

Officials say pro-business Democratic Alliance and senior figures in African National Congress objected to VAT rise

South Africa's Finance Minister Enoch Godongwana has been forced to postpone the unveiling of the national budget following sharp disagreements within the coalition government.

For the time being, South Africans can breathe a little easier, as the 2% increase would have a short-term negative impact, particularly because VAT applies to most goods and services, raising their costs and putting additional strain on consumers' wallets, he adds.

South Africa’s ruling coalition, made up primarily of the African National Congress and the Democratic Alliance, is showing signs of a possible crack in its government of national unity.

The announcement of Finance Minister Enoch Godongwana’s postponement of the Budget Speech on Wednesday sent shockwaves throughout the nation.This comes after a disagreement between parties within the Government of National Unity (GNU) on the proposals within the Budget.

South Africa’s Democratic Alliance (DA) party said the 2025 budget was postponed on Wednesday due to its opposition to a 2-percentage-point increase in value-added tax (VAT) proposed by the African National Congress (ANC).

South Africa’s budget announcement by the finance minister has been abruptly canceled and rescheduled for next month over a dispute among parties in the governing coalition