By Lehlohonolo Lehana.
The Western Cape High Court handed down a court order on Sunday that suspends the 0.5 percentage point VAT increase announced by finance minister Enoch Godongwana.
The court made the order on Sunday in the Democratic Alliance (DA) and Economic Freedom Fighters’s (EFF) court challenge to have the VAT rate adjustment set aside, as well as the resolutions of the National Assembly and national council of provinces to accept the report of the standing committee and select committee on finance.
The High Court’s decision comes only after Godongwana’s decision to withdraw the VAT increase.
The resolutions of the National Assembly and the National Council of Provinces, adopted on 2 April 2025, to accept the report of the Standing Committee on Finance and the Select Committee on Finance, on the 2025 Fiscal Framework are set aside,” the ruling states.
Godongwana, has been ordered to pay 50% of the Democratic Alliance and the Economic Freedom Fighters costs, while the speaker of the National Assembly and the chairperson of the National Council of Provinces are to pay the other 50% of the DA and EFF court costs.
Godongwana welcomes the clarity and certainty provided by the court order. Equally, he remains committed to fiscal responsibility and will pursue alternative measures to ensure sustainable public finances.”
He maintains that his initial budget proposal of 12 March 2025 was constitutional and appropriate given the limited options available to balance fiscal sustainability with service delivery needs.
The Speaker of the National Assembly said on Sunday evening that the court order will enable the minister to table the budget instruments afresh, adding that they have asked the minister to give an indication of when the budget will be tabled.
DA federal council chairperson, Helen Zille, said the ruling showed that government decisions cannot be made without proper oversight. “It also gives South Africans certainty that changes affecting their pockets will not happen without the necessary checks and balances in place,” she said.
“We are pleased that the minister of finance eventually came back to the table and agreed to suspend the VAT increase in a lawful manner.”