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The South African National Defence Force (SANDF) soldiers at the State of the Nation Address (SONA) in Cape Town on February 6, 2025.
Senior Economist at consultancy firm, Price Waterhouse Coopers (PWC), Xhanti Payi predicts that the Defence Department may see an increase in funding in Finance Minister Enoch Godongwana’s 2025 Budget Policy Statement in Cape Town this afternoon.
More than two weeks ago, 14 South African soldiers were killed in fighting between the M23 rebels and the Congolese military in the eastern Democratic Republic of Congo (DRC).
This has sparked calls for the withdrawal of the South African soldiers deployed to the DRC.
Some stakeholders, including political parties, say the soldiers are under-resourced because the department is underfunded.
Payi says, “The first area that we know to change is likely our spending on Defence. That’s the area that we’ve been cutting of a period of time in the budget last year that was seen to be growing only by 1%. Now we know that politicians are calling for much higher increases given the situation that we’ve seen in the DRC with South African soldiers that have been killed. So we’ll probably see some push to see increased spending.”
Possible tax increases
Meanwhile, labour unions are troubled by rumours of possible tax increases and want relief for poor households.
Experts believe that Finance Minister Enoch Godongwana will announce a raft of tax adjustments including value-added tax (VAT), personal income tax and corporate to cover the revenue shortfall.
On the other hand, the National Treasury says the budget allocation aims to strike a balance between growing the economy and supporting the vulnerable.
The Congress of South African Trade Unions (Cosatu) and the Federation of Unions of South Africa (Fedusa) say they will reject a budget that proposed tax increases.
