South Africa postpones budget speech over tax impasse

South Africa on Wednesday indefinitely pushed back the coalition government's first national budget speech to parliament in a shock move following internal pressures over tax hikes.

The speech to outline the government's fiscal priorities, including ways of raising revenue, was due to be delivered by Finance Minister Enoch Godongwana in parliament.

"We have decided to adjourn proceedings for a date to be determined," Speaker Thoko Didiza said during a charged session in the chamber.

There had been no agreement on the budget proposals between the parties in the executive, she said.

After ruling South Africa alone since the end of apartheid in 1994, the African National Congress (ANC) lost its majority in last year's elections, forcing it into a coalition.

The uneasy union saw the ANC join forces with nine other parties, including its long-running critic, the DA.

"The postponement...is a victory for the people of South Africa," DA leader John Steenhuisen swiftly said after the announcement.

The party had opposed a proposal to raise value added tax from 15 to 17 percent, he said, adding it "would have broken the back of our economy".

The postponement was nonetheless opposed by the radical-left Economic Freedom Fighters (EFF) party.

"There is no government, it has collapsed," EFF leader Julius Malema told parliament.

Africa's most industrialised nation is grappling with how to fill its coffers after it lost US aid, in part due to a recent law which US President Donald Trump alleged allowed the government to seize land from white farmers.

The economy is faced with issues on multiple fronts with inflation inching higher to three percent in December.

The country has among the highest levels of inequality in the world and poverty affects more than 60 percent of its more than 63 million people.

Unemployment edged downward in the last quarter of 2024 to about 32 percent, the government said on Tuesday, but the figure remains among the world's highest.