Thursday, 24 April 2025: - The South African Communist Party (SACP) welcomes the decision by the National Treasury, announced on 23 April 2025, to reverse the proposed Value-Added Tax (VAT) increases. This reversal marks a significant victory for the working class, achieved through persistent mobilisation, mass action and principled resistance led by progressive formations, including the SACP.

The immediate task facing the working class is to strengthen broadest unity to prevent the National Treasury from converting the hard-won reversal of the VAT increases into a Pyrrhic victory – a situation in which the victorious forces essentially face great costs, diminishing or completely undermining the value of their victory.

The SACP reiterates its call for a more progressive tax framework, a wealth tax, reversal of the last corporate tax reduction, increased support to achieve industrialisation, clamp down on illicit capital flows and decisive action against profit-shifting manoeuvres.    

To avoid a Pyrrhic victory, the working class must intensify the struggle against austerity. An intransigent National Treasury that views the reversal of the VAT increases as defeat will resort to austere measures to punish the working class. This is what the National Treasury actually indicates it would do by declaring that “The decision not to increase VAT means that the measures to cushion the lower income households against the potential negative impact of the rate increase now need to be withdrawn and other expenditure decisions revisited”.

Meanwhile, austerity involves cuts in budgets affecting the working class, mainly including lower income households, and development programmes. Austerity has contributed in no small measure to pushing South Africa into a crisis of economic stagnation, characterised by low growth rates. In turn, the National Treasury has used the stagnation to justify the destructive neo-liberal austerity.

The SACP has, from the outset, opposed any increase in VAT as an attack on the workers and poor. As we said in our statement on 22 February 2024, “The proposed VAT increase will deepen the crisis of social reproduction confronting the working-class and poor households”. This view was reiterated in our post-Political Bureau statement following the 2025 Budget Speech on 23 February 2025, where we emphasised that “VAT is a regressive tax that shifts the burden of the crisis onto the shoulders of the poor”.

Furthermore, in our Initial response to the budget delivered on Wednesday, 12 March 2025, we underlined our opposition to measures that entrench inequality and deepen social suffering: “This budget is shaped by the failed dogma of neo-liberalism, which sacrifices social development and inclusive growth at the altar of fiscal consolidation”.

The SACP also reaffirmed its position during the postponement of the Budget Speech on 19 February 2025, where we stated that “our rejection of the VAT increase goes hand-in-hand with our rejection of the neo-liberal economic framework being imposed on the country”.

We reiterate: the reversal of the VAT increase is not a gift from above, but a concession forced through struggle from below. It is an outcome of the militant unity of the working class and its allies. In this regard, we pay tribute to all progressive formations – trade unions, civic organisations, youth and student movements – that stood firm in defence of the working class.

On 12 March 2025, for instance, the SACP supported COSATU-led demonstrations across multiple provinces, including pickets and marches in Cape Town, Pietermaritzburg and Pretoria. These actions coincided with the tabling of the national budget and aimed to reaffirm opposition to VAT increases and austerity-driven budget cuts. Protesters called for a progressive, people-centred budget that addresses the needs of the working class.​

On 20 February 2025, members of various organisations, including the SACP, marched from Hanover Street in District Six to Parliament in Cape Town. The protest opposed budget cuts, austerity measures and the privatisation of essential services. This action was part of a broader movement resisting proposed increases in VAT and advocating for equitable economic policies

On 19 February 2025, the SACP, alongside COSATU, SAFTU and other social movements, participated in a “speak-out” at St George’s Cathedral in Cape Town. Activists from different provinces gathered to demand a “people’s budget” that prioritises the needs of the majority of people over elite interests. The protest highlighted the detrimental effects of austerity measures on social services, including education and healthcare.

On 30 October 2024, the SACP, alongside the COSATU, SAFTU and other social movements, led a march to Parliament in Cape Town. This protest was timed ahead of the Medium-Term Budget Policy Statement (MTBPS) to oppose austerity measures. The demonstrators expressed concerns over escalating living costs, high unemployment and poverty. We called for a well-resourced budget to address economic and social inequalities.​

In early October 2023, the SACP launched its annual Red October campaign in Phuthaditjhaba, Free State. General Secretary Solly Mapaila highlighted the National Treasury’s proposals for cutting government spending. He stated that neo-liberal austerity was an inappropriate response to economic development problems and that such measures would impose further burdens on citizens already experiencing financial hardship.