DA under fire for ‘hijacking' VAT reversal win. Other parties accuse it of holding budget hostage

News24

24-04-2025

The political fallout over the scrapped VAT hike has sparked a fierce war of words, with Patriotic Alliance deputy president Kenny Kunene and several other party leaders accusing the DA of political extortion and claiming undue credit for the government's U-turn.
Rise Mzansi leader Songezo Zibi was also sharply critical of the DA, accusing it of attempting to hold the budget hostage to other political priorities that have nothing to do with appropriation.
At a joint media briefing in Sandton on Thursday, Kunene dismissed the DA's court action as opportunistic and late, insisting it was broad-based negotiations — not legal threats — that persuaded Treasury to backtrack.
Echoing this sentiment, UDM's Mxolisi Makhubu mocked the DA's self-congratulation as 'a shallow claim of credit,' saying the retreat on VAT stemmed from unified political pressure, not a courtroom win.
This briefing followed an announcement by the National Treasury this morning that the government had backtracked on its plan to raise VAT by 0.5% next month but also warned that tough spending decisions lie ahead to fill a R75 billion budget gap.
In a statement released on Thursday morning, the National Treasury said:
The minister of finance will shortly introduce the Rates and Monetary Amounts and Amendment of Revenue Laws Bill ... which proposes to maintain the VAT rate at 15% from 1 May 2025, instead of the proposed increase.
It said that the move was made "following extensive consultations with political parties and careful consideration of the recommendations of the parliamentary committees."
In the morning after the Treasury's statement, the DA's federal chairperson, Helen Zille, released a statement welcoming the announcement.
She said:
This is a major victory for the DA and, more importantly, for millions of South Africans. This outcome follows sustained opposition by the DA in Cabinet, Parliament, and, most decisively, the courts.
Zille claimed that from the outset, the DA has opposed this tax increase, highlighting its impact on already struggling South African households.
'Our urgent court application filed in the Western Cape High Court exposed not only the unconstitutional and procedurally flawed nature of the VAT hike, but also the arbitrary power the Minister of Finance sought to wield in imposing it,' she said.
'The approach by lawyers acting on behalf of the Minister of Finance with a proposal for an out-of-court settlement to scrap VAT marks a critical turning point in this battle,' said Zille.
She said it was now clear that Treasury had no choice but to reverse its decision in the face of our relentless and strategic legal pressure.
She continued:
Ironically, the minister's backtracking underscores the very point made in our court application: that he had attempted to exercise unconstitutional powers to impose or withdraw VAT unilaterally. The DA is currently awaiting a formal written settlement offer before responding to the minister's request, and we will keep the public informed of developments.
Zille said that while this represents a significant step toward stopping the VAT hike, the process is not yet complete, adding that a final court order and a pronouncement on the validity of the fiscal framework by the Speaker must still follow.
She further claimed that their legal action achieved its intended result.
'When Parliament failed to act, the DA stood firm to protect the public from the consequences of a tone-deaf and anti-poor budget,' she said.
'While others folded, we fought and we won,' added Zille.
Kunene reiterated that 'the DA had no moral standing to claim victory.'
He said the DA had made its support for the budget conditional on the privatisation of a state-owned port and the scrapping of the National Health Insurance (NHI) and the Basic Education Laws Amendment (Bela) Act.
Kunene said:
So the DA was going to vote for VAT increase had the ANC and other GNU parties agreed to be extorted by them. So, when the extortionist could not get their way, they ran to the courts. So, the DA has no moral authority to claim victory for the removal of the VAT increase.
He said the DA had not participated in the actual negotiations that resulted in Treasury revising the VAT increase down from 2% to 0.5% and ultimately scrapping it.
Kunene said credit should go to the parties that voted for the fiscal framework — including GNU members (excluding the DA and FF Plus) — as well as parties outside the GNU, such as ActionSA, Build One SA (Bosa), and the National Coloured Congress (NCC).
He noted that the ANC and the Ministry of Finance had listened to the engagements that began earlier this year and adjusted their fiscal approach accordingly.
'Further deliberations happened, and these parties persuaded the Minister of Finance and Treasury to consider alternative means of making revenue for the shortfall.'
He criticised the DA for only 'claiming victory' after the minister's statement was issued.
'The Democratic Alliance waking up this morning after seeing the statement of the minister and claiming victory is quite hypocritical.'
According to Kunene, the DA never outright rejected the VAT increase but instead used it to push for concessions that served their political agenda.
'They tried to use it to privatise what South Africans own; they tried to use it to get positions in the GNU, they tried to use it to change what Parliament has already resolved on.'
'So, a party of extortionists has failed to serve South Africans on a very important matter of national interest. So South Africans, don't be misled.'
He pointed out that posters and boxes claiming victory had been placed around the Western Cape — governed by the DA — but insisted the legal process they initiated was still ongoing.
'The courts have not dictated to this party in the GNU; therefore, they cannot claim victory.'
The DA had turned to the courts in an attempt to halt the VAT hike.
Federal chairperson of the DA Helen Zille filed an urgent application in the Western Cape High Court on 3 April, seeking to interdict the increase and challenge Finance Minister Enoch Godongwana's authority under the VAT Act.
In part A of its application — which was heard on Tuesday — the DA asked the court for interim relief to suspend the implementation of the VAT hike, block Sars from enforcing the increase, and set aside Parliament's reports approving the fiscal framework.
In Part B, the party escalated its demands, calling for the VAT Act to be declared unconstitutional and for the VAT hike to be permanently scrapped.
Kunene, however, dismissed this legal challenge as an afterthought, insisting the DA was never part of the real negotiations that led to the policy reversal.
Kunene commended the Ministry of Finance for listening to the concerns raised by various parties, acknowledging that their objections came from constituencies they represent.
He expressed gratitude to ActionSA, Bosa and the NCC for their willingness to engage and vote for the fiscal framework despite not being part of the GNU.
'It shows that they understand that national interests are more important than party political points,' he said.
He also thanked ANC secretary-general Fikile Mbalula for leading the negotiations with impartiality.
'The Patriotic Alliance remains committed to the GNU, and we hope to see a different face, a different composition of the GNU in the future,' Kunene said.
But while the DA claims victory in the reversal of the VAT hike, not everyone agrees with their version of events.
UDM member Mxolisi Makhubu pushed back against the DA's narrative, arguing that their court action was opportunistic and came only after the party failed to strong-arm its way into influencing the GNU's direction.
'The Democratic Alliance welcomes Treasury's announcement that it intends to withdraw the planned VAT hike. This is a major victory for the DA and, more importantly, for millions of South Africans,' Makhubu said sarcastically, paraphrasing the DA's response before unpacking what he called 'a shallow claim of credit.'
He said the DA's urgent court application — which sought to interdict the hike and challenge the constitutionality of the VAT Act — came only after the party failed to extract concessions in Cabinet and Parliament.
Makhubu said the Treasury's approach to settle out of court should not be seen as vindication of the DA's stance, but rather as a practical response to sustained pressure from GNU-aligned and other opposition parties who had engaged constructively on the fiscal framework.
'Even Finance Minister Enoch Godongwana's own court papers confirmed the intention to proceed with the VAT hike. The backtracking wasn't a concession to the DA; it was the result of unified political pressure,' Makhubu said.
He added that while the legal process is still unfolding, it is misleading for the DA to parade the development as a personal triumph.
'Treasury's retreat is not a reconsideration. It is a retreat born of necessity in the face of broader political negotiation,' he said.