UPDATE: Ramaphosa makes last-ditch effort in meeting with Steenhuisen amid VAT deadlock

President Cyril Ramaphosa called an urgent meeting with DA leader John Steenhuisen on Tuesday morning, the Presidency confirmed.

This is Ramaphosa's last effort to come to an agreement with the DA after a deadlock on the budget.

Insiders with intimate knowledge of the talks concerning the budget said the ANC and ActionSA agreed on a set of proposals to be made on Monday after their meeting on Sunday.

TimesLIVE understands the ANC has also met the Freedom Front plus, reaching an agreement which does not include the proposed 0.5 percentage point VAT increase.

This comes as talks between the ANC and its biggest partner in the government of national unity (GNU), the DA, reached an impasse on Tuesday morning.

Also on Tuesday morning, DA leader John Steenhuisen posted on the X platform that the ANC refused to sign a deal on growth and spending reforms, “imperilling the GNU”. 

“The DA will oppose the budget unless and until a written agreement is reached,” he said. 

The deadlock in talks between the two parties is probably going to lead to a reconfigured GNU, high ranking ANC leaders told TimesLIVE.

According to the agreement with the ANC, ActionSA agreed to forgo a long list of budget reforms for its support of the passage of the budget. However, the two parties agreed on the removal of the VAT increase and the inflation-based adjustment of income tax brackets.

ActionSA said it will approach the committee meeting in a manner consistent with its public commitments, despite the ANC’s talks with the DA.

The party will move to amend the fiscal framework to remove the VAT and income tax increases for 2025/2026 at the parliamentary meeting.

The Sunday Times previously reported the ANC was working on contingency measures to mitigate against a possible exit by the DA. The ANC leaders said while EFF leader Julius Malema had indicated he would want to join the GNU, the red berets would be the last resort.

One ANC leader said while there was anxiety in the party about partnering with the EFF, given SA’s strained relations with US President Donald Trump's administration, the demands by the DA made it impossible to have a good working relationship.

A national working committee member said the notion that if the DA left the GNU the coalition would collapse was “utter nonsense”.

They said there was a fear that working with the EFF would create a worse impression of the GNU among global players.

One ANC leader said: “I can confidently say if the DA leaves the GNU, Herman Mashaba will be more comfortable to join. But in terms of the budget, ActionSA is important because the GNU has 287 of the 400 MPs. The DA has 87 and if you take them out we have 200. If you count out the FF Plus, we have 194. The moment you bring in ActionSA, you go back to 200 and if we can get another smaller party, maybe with two seats, we have the numbers we need.”

This is a developing story

TimesLIVE