ANC VAT increase would break economy, warns DA

South Africa’s Democratic Alliance defended its decision to obstruct a surprise plan to hike value-added tax, forcing an unprecedented delay in the presentation of the annual budget.

“It prevents the implementation of a 2% VAT increase that would have broken the back of our economy,” DA leader John Steenhuisen said Wednesday after the delay was announced. VAT is currently pegged at 15%.

“We will now fight with the same vigour to introduce a new budget that is anchored in growing the economy rather than increasing taxes or debt,” he said in a statement.

Finance Minister Enoch Godongwana was scheduled to deliver the budget to parliament at 2 p.m. in Cape Town. He later told reporters the presentation was postponed until March 12.

The DA, the country’s second-largest party, joined the African National Congress and eight other rivals in a so-called government of national unity after the ANC lost its parliamentary majority in elections last year. But the alliance has been strained.

“For the first time ever, the ANC was prevented from tabling an anti-growth budget. Now is the time to replace a failed ANC VAT budget with a brand new GNU growth budget,” Steenhuisen said.