Johannesburg – MPs in South Africa planned to sideline the budget for health and protect, but kept the price -added tax to 0.5%, a step that would increase the cost of life as consumers pay more for goods including food and services.
In the budget of 2525, an additional 28.9 billion rand ($ 1.5 billion) was placed for health expenses, Finance Minister Hanok Godongwana said, as the country is ready to cut for assistance from the US under Trump Administration.
Additional funds will pay the salaries of about 9,300 medical personnel and about 800 newly qualified doctors in clinics and hospitals.
Overall, health expenditure is expected to increase from 277 billion rands to 329 billion rands in 2024/25.
This growth is amid concerns that South Africa’s health system, which cares about the world’s largest HIV population and 5.5 million people on life-saving antiretroviral drugs, will stress the USAID cuts for international development.
In early February, President Donald Trump canceled the President’s emergency plan Peppar for AIDS Relief, providing more than $ 400 million annually to South Africa’s HIV programs and NGOs.
Although 74% of South Africa’s HIV reaction is domestic funded, some services depend on the funding of the US government, which makes about 17% of the country’s AIDS response budget.
Despite being one of the most developed countries in South Africa Africa, it struggles with high debt rates and slow GDP development.
Ministry spokesman Foster Mohle said that the Ministry of Health would soon start consultation about dividing the funds of the state, including allocation to fill the gaps left by the US cuts.
Mohle said, “It is too early to tell you how we are helping people affected by funding freeze.” “But we (soon) will be able to communicate how we are using this budget to try to cover some pressure areas.”
The latest budget has not yet been approved by the cabinet. Parliamentary committees will debate the budget before voting before the full legislature on the budget in the coming weeks. If it passes, it is free to use funds as allocated to ministries. However, if Parliament rejects it, new elections are called, and the administration resigns.
Some 5 billion rands ($ 271 million) were ringing for military forces beef, Godongwana said, “Fighting in Eastern Congo, confirming South Africa’s commitment to peace in the region as a fighting in the Eastern Congo.
To spend extra on health, education, transport and security, the government plans to consume half a percentage point in 2025-2026, or to increase VAT, expressed displeasure with political and civilian organizations.
VAT is payable on goods and services including food and electricity.
Another half percent point will be introduced in the next year, by 2026–2027, the rate of VAT will be kept at 16%.
“VAT is one tax that affects everyone. By selecting for VAT marginal growth, its distribution effects and impact were carefully considered, “the Finance Minister said, tried to close the MPs. “The growth is the most effective way to avoid further spending cuts and enable social wages.”
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