DA hails court ruling on VAT hike as victory for all
The Democratic Alliance (DA) has welcomed the Western Cape High Court’s decision to suspend the proposed VAT increase, describing it as a victory for all South Africans.
The ruling, delivered on Sunday, followed a legal challenge launched jointly by the DA and the Economic Freedom Fighters (EFF).
The two parties contested both the proposed VAT adjustment and the parliamentary resolutions from the National Assembly and National Council of Provinces, which endorsed the relevant finance committee reports.
The National Treasury had originally planned to raise VAT from 15% to 16%—a 1% increase—intended to improve revenue collection.
However, Finance Minister Enoch Godongwana announced on Thursday that the VAT rate would remain unchanged at 15%, effectively shelving the 0.5 percentage point increase that had been outlined in his recent Budget Speech.
The move is expected to create a revenue shortfall of approximately R75 billion.
Despite fiscal pressures, both the DA and EFF firmly opposed the VAT hike.
The DA argued that Parliament had failed to follow due process in approving the fiscal framework that underpinned the tax proposal, while the EFF raised concerns about the disproportionate impact the increase would have on low-income South Africans.
The DA emphasized that the court’s outcome reinforces the principle that major fiscal decisions must undergo proper legislative scrutiny.
READ MORE: Court halts VAT increase, parly fiscal approval overturned
It also argued that the ruling offers the public assurance that significant policy changes affecting their financial well-being will not be implemented without checks and balances.
“The impending VAT hike has now been formally stopped by an order of court agreed between the Minister of Finance and the DA. This also includes a settlement with the Speaker,”
The party reiterated its commitment to continue advocating for policies that promote inclusive economic growth and job creation.
"The DA will continue to fight for and with all South Africans to ensure that we create an economy that grows and creates jobs,"
In addition to suspending the VAT increase, the court also set aside Parliament’s adoption of the fiscal framework.
Meanwhile, the African National Congress (ANC) acknowledged the court’s ruling, stating that no decision had yet been made regarding the substantive arguments raised in the case.
“Parliament is now expected to pronounce on the way forward on the processing of the envisaged changes to the revenue proposals and the expenditure adjustments,” the party said in a statement.
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