Skip to content
Search

Latest Stories

What We're Watching

Coalition bust-up over VAT in South Africa?

​South African president Cyril Ramaphosa takes the national salute below a statue of former president Nelson Mandela at the Cape Town City Hall, ahead of his State Of The Nation (SONA) address in Cape Town, South Africa February 6, 2025.

South African president Cyril Ramaphosa takes the national salute below a statue of former president Nelson Mandela at the Cape Town City Hall, ahead of his State Of The Nation (SONA) address in Cape Town, South Africa February 6, 2025.

REUTERS/Nic Bothma

South Africa’s ruling coalition, made up primarily of the African National Congress and the Democratic Alliance, is showing signs of a possible crack in its government of national unity.

The two parties have been rivals in the past but agreed to work together following elections last May. They have exceeded expectations for how long the coalition could last, but challenges remain, and the DA has proven the weaker partner, with its policy proposals often ignored.


A fight flared between the parties on Wednesday over the ANC’s budgetary proposal to boost the value-added tax, or VAT, by 2%. If it passed, it would take VAT up to 17% on a broad variety of goods, services, and transactions, with exceptions for necessities like basic foodstuffs. The VAT increase was supposed to help fund improvements in security services, infrastructure, health care, and education programs.

But Finance Minister Enoch Godongwana delayed the budget presentation on Wednesday as a result of the squabble, making this year the first time the government won’t present its budget to parliament in February. Coalition leaders must now discuss adjustments before the rescheduled presentation on March 12 — and before the country’s fiscal year starts on April 1. But the delay does mark a win for the DA, showing it can hold its own against the more dominant ANC, even if it doesn’t yet have a viable alternative budget proposal.

While this may be a strong showing for the DA, Eurasia Group’s Amaka Anku says that none of the parties actually want the VAT.

“The ANC is really committed to projecting a sense of unity in the coalition and national government, of national unity, and not making this about ANC and the DA,” she says. Still, a tax increase in some form is likely to come since there’s no clear alternative for raising revenue.

More For You

A foreign tanker carrying Iraqi fuel oil damaged following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, on March 12, 2026.​

A foreign tanker carrying Iraqi fuel oil damaged after catching fire in Iraq's territorial waters, following unidentified attacks that targeted two foreign tankers, according to Iraqi port officials, near Basra, Iraq, on March 12, 2026.

REUTERS/Mohammed Aty
Iran’s focus: closing the StraitThe Islamic Republic will continue its efforts to block the Strait of Hormuz, according to a statement this morning attributed to new Supreme Leader Mojtaba Khamenei. The statement highlights Tehran’s strategy: identify easier targets (the Strait is narrow) that have maximum impact. Speaking of which, Iraq suspended [...]
​The Thailand-flagged cargo ship Mayuree Naree engulfed in black smoke in the Strait of Hormuz, March 11, 2026.

The Thailand-flagged cargo ship Mayuree Naree engulfed in black smoke in the Strait of Hormuz, March 11, 2026.

ROYAL THAI NAVY/Handout via REUTERS
US and allies desperately try to cool frightened oil marketsIran has been upping its threats against the world’s oil supply, striking at least one cargo ship yesterday and reportedly laying mines in the Strait of Hormuz, the waterway near Iran through which 20% of global oil supply passes. Its military command even suggested that the world should [...]
Sanae Takaichi announces running for presidential election of the LDP

Sanae Takaichi announces running for presidential election of the LDP

Aflo via Reuters
Japan strikes rare earths deal with largest non-Chinese producerAustralian mining giant Lynas will sell rare earths to Japan for 12 years in a major pact meant to chip away at China’s dominance of the global market. The highlight of the deal is that it sets a minimum price of $110 per kilogram of the minerals. That is the same “price floor” that [...]
Pirhossein Kolivand, head of the Iranian Red Crescent Society, stands in front of the Shahran oil depot, which was targeted by US-Israeli strikes, in western Tehran, Iran, on March 8, 2026.

Pirhossein Kolivand, head of the Iranian Red Crescent Society, stands in front of the Shahran oil depot, which was targeted by US-Israeli strikes, on the eighth day of the war in western Tehran, Iran, on March 8, 2026.

Sobhan Farajvan/Pacific Press/Sipa USA
Depot bombing, Strait of Hormuz constraints send oil prices surgingOil prices skyrocketed above $100 per barrel on Monday – nearly hitting $120 at one point – after Israel bombed fuel depots outside Iran’s capital of Tehran and data showed oil production along the Persian Gulf tanking due to the near-closure of the Strait of Hormuz. US President [...]