DA, EFF file urgent 2025 VAT increase interdict
The DA, supported by the EFF, have filed a 2025 VAT increase interdict. This will be heard in Western Cape High Court today, Tuesday 22 April 2025. The scheduled VAT increase is set to take effect on Thursday 1 May, ironically, the Workers' Day public holiday.
Nevertheless, experts predicted the controversial 2025 Budget would be battled out in court and so it is proving. The DA and EFF have brought forward their 2025 VAT increase interdict, challenging the legality of the tax hike.
Both parties argue it will have a negative impact on the economy. Particularly on struggling South African households on SASSA grants. Moreover, that rapidly rising cost of living through VAT increases will affect primarily the poor and vulnerable citizens.
Specifically, the High Court today will hear the challenge of the 2025 Fiscal Framework and Revenue Proposal. And the constitutionality of amendments to section 7(4) of the VAT Act. It believes the Minister of Finance is not allowed to simply adjust the VAT rate.
Meanwhile, Minister Godongwana has responded by arguing the DA and EFF's challenge is 'misdirected and based on fundamental misinterpretation of the law.' He says there is provision for the Minister of Finance to amend the VAT Act. 'A temporary and conditional authority to adjust the rate for 12 months, subject to Parliament's power to enact legislation,' explained Godongwana.
Furthermore, the DA's opposition to the 2025 VAT increase could even unravel the very fabric of the Government of National Unity (GNU), after the ANC failed to win a majority vote in 2024. 'The DA is pursing the 2025 VAT increase interdict legal to prevent what it believes to be an unjustified burden on already struggling South African households. An increase will further escalate rising cost of living, disproportionately affecting the poor and vulnerable,' confirmed the DA in a statement.
Likewise, the EFF applied to join today's legal action. It said it wants to protect the democratic processes that determine the use of public resources. 'The court application is a necessary and principled intervention to protect the democratic character of Parliament,' said EFF spokesperson Sinawo Thambo.
In contrast, Minister Godongwana has defended his decision yet again to increase VAT by one percentage point over two years (2025-2026). According to Godongwana, halting the VAT increase would create a loss of R13.5 billion in revenue. In turn, this would lead to spending/jobs cuts and increased borrowing.
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