The challenge comes just a day after the Finance Minister Malusi Gigaba has delivered his maiden 2018 National Budget at the National Assembly in Cape Town. "We therefore decided that increasing Value-Added Tax was unavoidable if we are to maintain the integrity of our public finances", said Gigaba. The rand, which was the best-performing emerging-market and major currency against the dollar on Wednesday, weakened 0.3% to 11.6924 by 06:38 on Thursday.
South Africa remains polarized by inequality more than two decades after the end of white-minority rule in 1994, with the lion's share of the economy still in the hands of the white minority population.
Much of the blame for the state of the economy has been laid at the door of Zuma and his allies.
The policy is a gamble for the ruling African National Congress (ANC) as it could hurt its poor and black middle-class electoral base going into elections in 2019. Zuma and the Guptas denied any wrongdoing.
"The current zero-rating of basic food items. will limit the impact on the poorest households", Gigaba said.
Moody's said in November that its determination on whether to remove South Africa's local currency investment grade credit rating may not come until after the February budget statement.
Then in June previous year the amaBhungane Centre for Investigative Journalism and the Daily Maverick website's Scorpio unit unveiled the so-called Gupta Leaks - a trove of more than 1 million electronic documents.
Rating agencies will also closely monitor the budget after S&P Global Ratings and Fitch downgraded South African debt to "junk" status a year ago, citing the dismal economic outlook. It said it would make a decision after the budget.
"The budget was probably enough to avoid another downgrade, at least for now", said John Ashbourne, Africa economist at Capital Economics in London.
"The president ultimately has the prerogative over this issue", Gigaba told reporters before his speech.
He also said Treasury "had to strike a balancing act" by dealing with the economy's problems rather than taking a populist, pro-growth programme to win the next election. Opposition parties and lawyers for the victims and their families have insisted that he played a part in the bloodshed after pressing the authorities to crack down on the strikers. "Gigaba must resist the temptation to plug the massive budget hole by reaching into the pockets of ordinary South African people, especially the poor".