By Lehlohonolo Lehana.
The Economic Freedom Fighters (EFF) leader Julius Malema says the Government of National Unity (GNU) failure to deliver a lawful budget will trigger a constitutional crisis leading to its collapse.
This follows a Western Cape High Court Order which has suspended the 0.5% VAT Increases and set aside the 2025 Fiscal Framework and Revenue Proposals, 28 April 2025.
Malema was addressing a media briefing following the Western Cape High Order on Sunday.
The ruling, delivered on Sunday, followed a legal challenge launched jointly by the Democratic Alliance (DA) and the 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.
Malema said the EFF has maintained that fiscal adjustment must not occur at the expense of the poor and the working class.
“Unwilling to listen and arrogant, the minister returned to Parliament on 12 March with a so-called revised budget. Yet the core proposal remained the same: a VAT increase, albeit now by 0.5% for the 2025/26 financial year.
“The EFF immediately rejected this revised budget, rightly identifying it as a shallow political compromise aimed at appeasing financial markets, not a genuine response to economic stagnation and mass unemployment. We maintained that fiscal adjustment must not occur on the backs of the poor and the working class,” Malema said.
Malema said public money was wasted twice, as two of the budgets haven’t succeeded, asking what the chances are that budget 3.0 will be done properly.
“A day gets called special for him (Gondongwana). Money was used for the second time to do illegal activities, even when you are told this is illegal, they went to waste public money on illegal activities.
Malema added that South Africa now faces an urgent task.
“A credible third budget for the 2025/26 financial year must be tabled by no later than July. The current government must either deliver a lawful budget within this time frame or accept that its failure to do so will trigger a constitutional crisis leading to its collapse and fresh elections.”
Malema proposes that the government must introduce an Apartheid wealth tax trust to generate R30 billion, increase corporate income tax from 27% to 28.5% and introduce an annual levy on inherited wealth over R10 million.
Godongwana is now expected to table a revised fiscal framework — it has to be tabled in Parliament’s Finance Portfolio Committee and then go to the Appropriations Committee.
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.
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.