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Daily Maverick
4 days ago
- Business
- Daily Maverick
EFF vs fuel levy increase — court challenge tests legality of fiscal decisions
The EFF has filed an urgent court bid to block Finance Minister Enoch Godongwana's fuel levy hike, arguing it is irrational, economically harmful and unlawfully implemented. This is not just the EFF showing commitment to its stance against the increase, but a relatively novel legal precedent that could have far-reaching implications. A last-minute legal bid On Thursday, 29 May, the EFF filed papers in the Western Cape Division of the High Court to block a fuel levy increase announced eight days earlier during the Minister of Finance's Budget 3.0 tabling. The case makes an unusual use of Rule 53 of the Uniform Rules of Court — a procedural mechanism regularly used to challenge administrative decisions — to challenge a fiscal measure introduced by the Treasury in Budget 3.0. 'We took this action after repeated efforts to caution the minister and appeal to his conscience failed,' said the party in a statement issued on the same day, stating that an increase without a Money Bill 'risks the entire national Budget being declared invalid by the courts'. Though it hasn't sparked the same political uproar as the aborted VAT hike, the fuel levy increase is just as important, as a fuel increase touches aspects of almost all supply chains, increasing costs across every facet of life. As economist Dawie Roodt told Daily Maverick, '… in terms of the effect on the poor, that is pretty much the same as the VAT increase'. The fuel levy increase — 16c per litre for petrol and 15c for diesel — is scheduled to come into effect on 4 June. The EFF is seeking urgent relief before this happens. The EFF Treasurer-General, Omphile Maotwe, told Newzroom Afrika the Treasury intended to gazette the increase on 3 June, 'to allow us no window or opportunity to interdict', hence the urgent application. The EFF's legal logic The application has two parts: Part A seeks an urgent interdict halting the increase and Part B calls for a full review and potential nullification of the decision, with the EFF arguing the increase must be reviewed in light of worsening inflation, stagnant wages and the fallout from the abandoned VAT hike. While it's true that the fuel levy is a regressive tax, Roodt argues that the Treasury's hands are largely tied regarding other measures to generate revenue. 'South Africa's tax burden is already dramatically redistributive. You can't make it more so,' he said. In its founding affidavit, the EFF argues that the fuel levy hike is procedurally flawed and substantively irrational. There was no consultation with Parliament, no socioeconomic impact assessment and no engagement with affected sectors. The party says the decision punishes low- and middle-income households already buckling under cost-of-living pressures. While the minister has statutory power to adjust the levy, the EFF argues that using this mechanism — without oversight or legislative process — amounts to executive overreach. The party called the increase 'yet another demonstration of the anti-black, anti-poor, neoliberal Budget the ANC government continues to impose on the people of South Africa'. No word yet from Treasury By the time of publication, the National Treasury had not responded to detailed questions from Daily Maverick about whether a socioeconomic impact study had been carried out, whether consultations with industry had occurred, and what the Treasury would do if an interdict were granted. This article will be updated once a response is received. Minister in the Presidency Khumbudzo Ntshavheni did not discuss the fuel levy, but defended the broader Budget at a briefing to the media on Friday, 30 May. 'This pro-poor Budget means [that] on every rand, 61 cents of consolidated, non-interest expenditure funds will be spent on free basic services … social grants for those in need.' A silent tax indeed The fuel levy is often called a 'silent tax' — embedded in pump prices and not itemised like VAT. Its revenue flows into the National Revenue Fund and is not earmarked for roads or transport. Between 2012 and 2022, the general fuel levy rose from R1.77 to R3.93. It now accounts for about 6-7% of pump prices. The 2025 increase is expected to raise R2.9-billion. Filling a 50-litre tank will cost about R8 more — a cost that ripples through logistics, transport and food prices. Unlike some OECD countries, South Africa lacks fuel subsidies or robust public transport, making the levy a heavier burden for poor households. Can fiscal decisions be challenged in court? Yes, as the EFF and DA's challenge of the VAT hike showed clearly — but this time the mechanism is different. That case primarily rested on constitutional and procedural grounds. In this matter, the EFF is invoking Rule 53, seeking a review of the minister's decision. The rule requires the state to produce the full record of decision-making, allowing the applicant to supplement their case. Rule 53 is usually applied to administrative actions — permits, suspensions, authorisations — and not budgetary policy. The stakes next week The urgent interdict will be heard on Tuesday, 3 June. If granted, the levy will be paused pending the main review. If refused, it may take effect as scheduled, making a later review moot. Should the court ultimately side with the EFF, it could invalidate the hike retrospectively, forcing the Treasury to re-table it through proper legislative channels. The ruling could also set a legal precedent, inviting future litigation over fiscal instruments previously seen as untouchable. Who really pays? Much of South Africa's fiscal debate is cloaked in specialised language: 'consolidation paths', 'debt stabilisation', 'medium-term frameworks', but the impact is direct: it's on you and I. Fuel taxes inflate the cost of moving people and goods, from taxis to tractors. The EFF's challenge isn't likely to unravel the Treasury's broader strategy, but it could set a strong precedent for how fiscal policy can be challenged; at its core, the case asks who gets to hold the pen when new taxes are imposed, and if the courts should step in if Parliament does not. DM
IOL News
6 days ago
- Business
- IOL News
Cabinet unmoved by EFF's looming fuel levy increase court challenge; says Malema's party is entitled to pursue litigation
Minister of the Presidency Khumbudzo Ntshavheni says the government will study and report back on the implication of the fuel levy on fuel prices. Image: GCIS Minister in the Presidency Khumbudzo Ntshavheni says the EFF was within its rights to approach the courts over the increase in the fuel levy proposed by Finance Minister Enoch Godongwana. Addressing the media after Wednesday's Cabinet meeting, Ntshavheni said she had no idea what argument the EFF had made in their court papers. 'But we have always had a fuel levy in this country as government, and shortly we will come back on the implication of the fuel levy on the fuel prices in the country as we try to mitigate the high cost of living. 'They can go to court. They are entitled to go to court, but it does not stop us from proposing a budget. The fuel levy has been part of the budget of South Africa since time immemorial,' she said. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ntshavheni made the comments after the EFF announced that it had filed an urgent application in the Western Cape High Court on Thursday to interdict Godongwana from increasing the fuel levy by 16 cents and diesel by 15 cents. Godongwana had announced the proposed fuel levy when he tabled the budget earlier this month after he scrapped the VAT increase amid a court case that was instituted by the EFF and the DA as well as negotiations between the ANC and smaller parties. In a statement, the EFF said it took the action after repeated efforts to caution and appeal to Godongwana to consider the impact of the increase in the fuel levy on the poor and working class when the cost of living was deepening. 'We also reminded him that that, just like the VAT increase, raising the fuel levy without introducing a proper Money Bill is unlawful and undermines parliamentary oversight." The red berets had also written to National Assembly Speaker Thoko Didiza and finance standing committee chairperson Joe Maswanganyi, warning against adopting the 2025 fiscal framework and revenue proposals that included the fuel levy as doing so would place the entire budget process in jeopardy. 'This matter is urgent not just because of its legal implications, but because the fuel levy directly affects the price of transport, food and other essentials. Any increase will hit the poorest the hardest,' said the EFF. Meanwhile, the Cabinet has affirmed its support for the 2025 national budget that was tabled by Godongwana on May 21. 'The national budget has demonstrated our commitment to fiscal discipline. We have shown that we are steering the economy in the right direction that looks after the most vulnerable in our society, while investing in economic activities through investment of R1 trillion towards infrastructure over the coming three years.' Asked whether all the Government of National Unity parties will vote in favor of the budget, Ntshavheni said they expected that to happen, but the parties have to be asked individually. 'As I have indicated, in all the times that we have at the Minister of Finance has gone to present the budget, they have always been in agreement in Cabinet saying, this is the budget we are going to support, despite its weaknesses,' she added. Ntshavheni also said the Cabinet welcomed the reset of strategic relationships between South Africa and the US during President Cyril Ramaphosa's working visit to the US. She said teams will finalise the details of the trade deal between the two countries. 'The objectives that the South Africa team had set for the trip have been met.' Highlighting some of the elements featured in the trade deal, Ntshavheni said they still have to discuss the tariffs, including the non-tariff barriers.
The South African
29-05-2025
- Business
- The South African
EFF takes legal action to block fuel levy hike
The Economic Freedom Fighters (EFF) have filed an urgent application in the Western Cape High Court. They want to stop Finance Minister Enoch Godongwana from implementing the fuel levy increase announced in the 2025 Budget Speech. The government plans to raise the fuel levy by 16 cents per litre for petrol and 15 cents for diesel, effective from June 2025. The party claims it repeatedly cautioned the Minister and appealed to his conscience. It warned him of the impact such a move would have on poor and working-class South Africans amid a deepening cost-of-living crisis. The party insists that the government should follow proper constitutional and legislative processes for the fuel levy hike. It compares this to how Parliament previously rejected the VAT increase. The EFF warned that skipping Parliament weakens democracy and could lead to more bad decisions in future. The EFF warns that implementing the levy without a Money Bill could lead the courts to declare the national budget invalid even after the funds have been spent. The party says such a ruling would jeopardise the country's fiscal credibility, disrupt service delivery and damage public confidence in government institutions. They stress that the issue is not only legal but economic, as the fuel levy directly affects transport, food, and other basic goods. The EFF says the increase will hit the poorest households hardest. It insists it will not stand by while technocrats override democratic processes. The EFF has written to the Speaker of the National Assembly and the Chairperson of the Standing Committee on Finance. It warned them not to proceed with adopting the 2025 Fiscal Framework if it includes the fuel levy hike. They urge Parliament to act responsibly and call on the Minister to withdraw what they describe as a reckless decision. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 . Subscribe to The South African website's newsletters and follow us on WhatsApp , Facebook , X, and Bluesky for the latest news.
Express Tribune
11-03-2025
- Business
- Express Tribune
CB examines IDPs rehab in super tax case
A member of the Supreme Court's Constitutional Bench (CB) has questioned the government's plan for reconstructing areas affected by Operation Zarb-e-Azb, initiated in 2014 to eliminate terrorist hotbeds in what is now North Waziristan district. A five-member CB led by Justice Aminuddin Khan on Tuesday resumed hearing a slew of petitions filed against imposition of a super tax in 2015 for the rehabilitation of the people internally displaced by the military operation. During the hearing, Justice Jamal Khan Mandokhail asked about the government's plan for the rehabilitation of areas affected by the operation. "Was any PC-1 [Project Concept-1] prepared for the resettlement of the affected areas? Was any estimate made for the rehabilitation of the affected regions?' He also asked if a tax on services can be imposed through a money bill. One of the lawyers of the companies which challenged the tax, Makhdoom Ali Khan, argued that the government initially enforced the super tax as a one-time measure through the 2015 Money Bill. "However, its implementation continued from 2015 to 2022. The government's initial estimate was to collect Rs80 billion. It is unclear how much revenue was actually generated under the Super Levy Tax," he added. He stated that the government had already collected income tax on earnings, and to avoid double taxation, it was named a "super tax." He argued that social welfare is now a provincial subject and that this was not a super tax but simply another tax. Justice Muhammad Ali Mazhar inquired whether the Super Levy Tax was imposed for a single year. The companies' lawyer responded that it was initially implemented for one year. Justice Mandokhail asked if there was any record of the total amount collected under the super tax. Justice Mazhar remarked that the super tax was imposed once for a specific purpose and questioned whether it would continue indefinitely. Makhdoom Ali Khan argued that the rehabilitation of areas affected by the military operation was a local and provincial matter. The case hearing will resume today at 9:30am.
