EFF hosts VAT reversal ‘victory march’

Supporters will gather at the Union Buildings before marching to the National Treasury offices, days before the 2025 national budget is set to be tabled in the National Assembly on Wednesday.

Budget 3.0 follows two ultimately unsuccessful attempts to pass a budget earlier this year. 

The first tabling in February was cancelled due to disagreements among the Government of National Unity (GNU) partners over a proposed two-percentage-point increase in VAT.

A revised budget was introduced in March by Finance Minister Enoch Godongwana, proposing two VAT increases of 0.5 percentage points each, to be implemented over two financial years.

However, the Western Cape High Court suspended the implementation following a legal challenge by the EFF and Democratic Alliance (DA), prompting the need for a new budget.

Godongwana is now expected to present the 2025 Fiscal Framework and Revenue Proposals, alongside the Appropriation Bill and Division of Revenue Bill.

The EFF is framing Monday’s march as a celebration of what it calls a successful effort to block the VAT hike, both in Parliament and in court.

The court granted an interim interdict last month, halting the first VAT increase. 

The EFF and DA argued the hike would worsen the cost-of-living crisis, especially for low-income households, and further drive up food prices.

Although Parliament approved the fiscal framework with 194 votes, backed by the ANC, IFP, Patriotic Alliance, Rise Mzansi, and others, the EFF maintains the process was unconstitutional and failed to follow proper procedure.

Advocate Tembeka Ngcukaitobi, representing the EFF, told the court that increasing VAT from 15% to 15.5% would deepen inequality and disproportionately burden the poor.

He also criticised Parliament’s rejection of the Finance Minister’s proposal to zero-rate certain basic goods, which could have provided some relief.

“The Committee explicitly rejected zero-rating at point 6.30 of its report, saying it was a blunt instrument, as poor households still pay VAT on many items not included in that list,” said Ngcukaitobi.

Instead, the Committee recommended that the Treasury consider input from stakeholders, including appointing an expert panel to review the zero-rated items, a proposal that was ultimately dismissed.

Ngcukaitobi pointed out that Parliament’s report acknowledged the adverse effects of the VAT hike on low- and middle-income households, but pressed ahead regardless.

“Across six sections of the report, the Committee recognised that the 0.5% increase would worsen inequality in what is already the most unequal country in the world, according to the Gini coefficient,” he said. 

“Yet none of these concerns were addressed before the decision was made.”

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