DA won't exit Government of National Unity over VAT controversy, Zille confirms

The Democratic Alliance remains committed to GNU despite the VAT hike disagreement, says Helen Zille.

The Democratic Alliance remains committed to GNU despite the VAT hike disagreement, says Helen Zille.

Image by: IOL/Independent Newspapers

Published Apr 14, 2025

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Helen Zille, Federal Council chairperson of the Democratic Alliance (DA), has reiterated the party's dedication to its role within the Government of National Unity (GNU), stating that leaving the coalition was never a consideration following rising tensions surrounding the recently approved 0.5% increase in Value Added Tax (VAT).

In an interview with eNCA on Sunday, Zille emphasised the DA's determination to remain engaged in the GNU to effect meaningful change rather than exit over policy disagreements.

Context of the VAT Hike

The controversy arose after the ANC's decision to implement a VAT increase, which was approved by Parliament's Finance Committee with a vote of 194 to 182. The VAT rate is set to rise to 15.5% on May 1, 2025, and to 16% on April 1, 2026, generating an estimated R13.5 billion in additional revenue.

The increase received backing from the ANC, ActionSA, the IFP, and BOSA, prompting the DA to voice its objections and pursue a legal dispute over the passing of the fiscal framework and revenue proposal.

The party claims that the decisions taken by the National Assembly and National Council of Provinces (NCOP) were "fundamentally flawed" and "unlawful".

Zille clarified that while the DA opposes the VAT hike and is prepared to contest it in court, leaving the GNU was never on the table.

"We knew there was never a discussion about leaving the Government of National Unity over the VAT hike," she stated, underscoring the DA's intent to advocate for South Africans' interests from within the coalition.

She highlighted the importance of open dialogue among the GNU partners.

"We were very frank with each other. We spoke directly. It was very constructive, but we didn’t mince our words." 

Zille stressed the need for a "rule-based GNU" that is grounded in the agreements established in June of the previous year.

A Focus on Economic Growth

Zille outlined the DA's strategy to leverage its position within the GNU to promote economic growth and job creation despite the challenges ahead. 

"We continue in the GNU to push the envelope and drive a growth and jobs agenda," she asserted, emphasising the party's commitment to addressing the economic challenges faced by many South Africans, particularly those living in poverty.

The fight against the VAT increase is seen as part of a broader struggle for fair economic policies.

The Road Ahead

Both the ANC and IFP have characterised the VAT increase as a temporary measure, urging the government to seek alternative revenue streams to ease the financial burden on consumers.

However, the DA's position remains firm: the party will continue to challenge policies it views as unconstitutional or detrimental to the citizens it represents.

As South Africans brace for the impending VAT hikes, Zille's decision to remain within the GNU reflects a strategic choice to influence policy from within rather than retreating to opposition.

She argued that the DA's efforts to contest the VAT hike in court and advocate for a more equitable economic framework demonstrates a commitment to governance, even amid significant ideological differences.

The ongoing discussions about the VAT hike and its implications for the South African economy will undoubtedly shape the political landscape in the coming months, as coalition partners navigate their differing priorities in pursuit of a better economic future for South Africa.

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