Tax & Spend
South African Budget Delayed as Parties Feud Over Tax Hike
- Democratic Alliance said it wouldn’t accept VAT increase
- Dispute is a setback to efforts to rein in government debt
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South Africa’s rand and bonds weakened after parliament postponed the presentation of the annual budget by three weeks, an unprecedented delay that highlighted increasing strains in the nation’s coalition government.
The Democratic Alliance, the second-biggest party in the alliance, complained that it hadn’t been adequately consulted over a plan to raise the value-added tax rate by 2 percentage points to 17%, and it wouldn’t accept it. Finance Minister Enoch Godongwana denied the allegation, saying only a few market-sensitive facts had been withheld.