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.

The reason for the abrupt cancellation was the failure of the minister to get cabinet approval for the proposal to raise value added tax (VAT) from 15% to 17%. VAT is the second biggest contributor to tax collection after personal income tax, followed by corporate taxes.

South African Finance Minister Enoch Godongwana presented highlights of his upcoming budget to colleagues two weeks ago, but skipped a crucial detail to stop it from leaking — triggering a major fallout in the nation’s coalition government.

Disagreement over a 2% VAT hike within the ruling coalition sees parliament postpone the National Budget Vote at the eleventh hour.

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

As South Africa approaches the highly anticipated budget speech, economists, Dawie Roodt and Ulricht Joubert, have painted a bleak picture of the country’s economic future, warning that the Minister of Finance faces a difficult and challenging task ahead.

The leader of the Democratic Alliance, the second-largest party in South Africa’s coalition government, will brief the media about its stance on the budget process amid reports the Treasury is about to raise taxes.

In an unprecedented move, the 2025 Budget Speech for South Africa was rescheduled for March 12, after initially being postponed due to disagreements within the Government of National Unity (GNU). Several parties within the GNU disagreed with the budget proposals.