Godongwana says he won’t resign after VAT U-turn

By Karin Strohecker and Colleen Goko

South African Finance Minister Enoch Godongwana said on Thursday he will not resign after the government’s U-turn on a planned value-added tax hike, despite opposition calls for him to quit.

“My job is to introduce money bills – nothing says they must be popular,” he told Reuters on the sidelines of the International Monetary Fund and World Bank spring meetings in Washington.

Godongwana, who landed in the U.S. capital this week already grappling with the worst rift in U.S.–South African relations in decades, was forced on Thursday to scrap a rise in the value-added tax that threatened the stability of the ruling coalition government.

The proposal to raise the VAT by 1 percentage point over two years, which was intended to boost state revenue, met resistance as Africa’s most industrialized economy grapples with sluggish growth and public discontent over rising living costs.

The about-turn blows a 75 billion rand