DA: Court action forced VAT u-turn

DA Federal Chairperson Helen Zille believes the finance minister’s abrupt backtrack was triggered by legal pressure following the party’s court challenge to halt the increase. 

"The arguments were so clearly framed that I have no doubt that the minister's legal team went back to him on Wednesday morning, the day after our court case, and said it looks as if it is going to be inevitable that the 0.5% VAT increase that takes effect on the 1st of May could well be set aside by the court. 

"In that context, it seemed better for the minister to concede before he was perceived to have been forced to by the outcome of the DA's court challenge."

Zille told the media the DA’s legal and political action ensured South Africans, particularly the poor and working class, were spared an unjustified tax burden. 

"This is the victory of all South African taxpayers. We'd like to thank you all for coming into this fight shoulder to shoulder with us."

She accused the finance minister of trying to "save face" by crediting smaller parties for the decision.

"The issue that the [African National Congress] fears more than anything else is that the public will come to understand the extent of the DA's muscle in holding the balance of power and the impact that we can make, both through the political process, and then the legal process, if the political process proves impermeable, as it did this time.

"The minister needs to somehow save face by saying, I'm making this concession, and I'm doing it after the consultations with the smaller parties and obviously, the smaller parties will want to claim some credit in having negotiated their way out of a VAT increase. 

"That argument obviously cannot hold water, because a lot of negotiations had happened supposedly with the smaller parties before last Thursday."

Zille says the party wants to cut wasteful expenditure.

"We want to cut corrupt and fruitless expenditure, and that is what our spending review seeks to achieve, which will include obviously a review of all the ghost workers in the state to save many millions of that that is costing the taxpayer at the moment. 

"There's going to have to be a spending review, we're going to have to look at where we can cut waste, not frontline services, and where we can protect the poor, especially from any increase in taxation that makes them have to choose between putting food on the table or putting their children into school because no longer are the VAT increases affordable."

She confirmed the DA received a formal proposal for an out-of-court settlement.

“We are now expecting from the minister's lawyers a formal settlement proposal. We will respond to that settlement proposal through our own lawyers. And if we can reach agreement, including on the issue of costs, we will seek to have that agreement made in order of court.”

Meanwhile, the ANC held a separate media briefing with smaller parties, including Action SA, the Inkatha Freedom Party, Rize Mzansi, Build One South Africa, and the United Democratic Movement, among others. 

In its statement, the ANC said the DA cannot claim victory in Cabinet, Parliament or the courts, adding that what the party sought to brand as a "victory" is in fact the result of ANC-led consultations and consensus-building.

The DA and ANC are expected to meet on Friday.

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