South Africa's EFF party seeks to block fuel tax increase
JOHANNESBURG, June 3 (Reuters) - South African ultra-left opposition party, the Economic Freedom Fighters (EFF) went to court on Tuesday to try to block a fuel tax increase that the finance minister proposed in last month's budget.
The 4% increase in the levy South Africans pay on petrol and diesel is due to kick in on Wednesday, but the EFF wants the High Court to suspend it on the basis that it is unjust and that the minister did not follow proper parliamentary process.
"This increase places an unjust burden on the working class and the poor, who are already reeling from rising costs of living, stagnant wages, and ongoing economic hardship," the EFF said in a statement before a court hearing in Cape Town.
In a sworn statement, Minister Enoch Godongwana said he had the right to raise the fuel levy and that the EFF's case appeared aimed at blocking passage of the budget, which he already had revised twice due to disagreements in the coalition government.
Godongwana said that if the court blocks the tax increase, it would leave a revenue shortfall of at least 3.5 billion rand ($196 million), which would have to be recovered through additional borrowing, taxes or spending cuts.
He has already backtracked on a contentious plan to raise value-added tax, under pressure from the second-biggest political party in the coalition, the Democratic Alliance, and others outside it.
Investors want to see evidence that Africa's biggest economy can rein in spending and hit revenue targets after a steep rise in public debt over the past two decades.
($1 = 17.8613 rand)
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