South Africa court finds finance minister violated constitution

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"We had run out of options", Gigaba told a business breakfast in Cape town a day after tabling his maiden budget where he announced a Value-Added Tax increase to 15 percent from 14 percent starting in April, the first such hike in 25 years.

While COSATU was cognisant of the pressures the government was seeking to juggle it budget, Parks said the labour body was concerned that this was coming on the "backs of struggling and middle classes".

Finance minister Malusi Gigaba, who had earlier warned the budget would "bear some pain", said on Wednesday: "This is a tough but hopeful budget". Their grants will increase on April 1st from R1,600 (137.1 dollars) to R1,690 (144.8 dollars) while the Child Support grant will increase from the baseline of R380 (32.6 dollars) to R410 (35.1 dollars).

Zuma has denied all wrongdoing.

This rate has been the same since 1993 and Gigaba indicated that it is still a low rate compared to some of South Africa's peers.

And the Treasury saw GDP growth at 1.5 percent this year, up from an estimated one percent last year, helped by a recovery in agriculture and improved investor sentiment.

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However, Gigaba will still need to walk a fine line going forward, as ratings agencies will be actively watching how well the country is able to stick to his budget, said Jacques du Toit, senior property economist at Absa Home Loans.

Gigaba told a media briefing before the budget that Treasury had done enough to avoid a downgrade, by taking decisions to stabilise debt and reduce the budget deficit.

This being said, there is still uncertainty over the implementation of other proposals made by the DTC, such as a possible increase in the estate duty exemption from ZAR3.5 million to R15 million, the possible abolition of the spousal exemption from estate duty and Capital Gains Tax rollover, or the proposed changes to the taxation of trust income, she notes.

South Africa opposition, Democratic Alliance (DA), disagreed with him that the Zero-rating food will provide relief to the poor. "I still believe the poor will be cushioned by the strength of the rand".

The EFF's Red Berets boycotted the budget speech in Parliament yesterday. It required us to make hard but necessary trade-offs, important to ensure that this budget is a platform for renewal, inclusive growth and job creation. It demanded that Gigaba, a Zuma ally, be removed.

Ramaphosa took over as leader of South Africa last week after Jacob Zuma stepped down on orders of the ruling African National Congress, bringing to an end nine years of corruption scandals and economic mismanagement.

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