The Western Cape High Court will on Tuesday hear an urgent legal bid by the Democratic Alliance (DA), supported by the Economic Freedom Fighters (EFF), to halt South Africa’s contentious Value Added Tax (VAT) increase, set to take effect on May 1.
The opposition parties are challenging the legality and constitutionality of the 2025 Fiscal Framework and Revenue Proposals, announced by Finance Minister Enoch Godongwana during his budget speech last month. Central to the dispute is a proposed 0.5 percentage point VAT hike, which the DA and EFF argue will exacerbate the cost-of-living crisis and disproportionately affect low-income households.
In its court papers, the DA describes the tax measure as a “regressive burden” that was adopted through a “fundamentally flawed and unlawful” parliamentary process. The party is also contesting the constitutionality of Section 7(4) of the VAT Act, which allows the Minister of Finance to temporarily adjust the VAT rate, pending parliamentary approval.
“This is a betrayal and a burden to the poor and must be stopped,” the DA stated, warning that the tax hike would deepen inequality in a country where millions already struggle to meet basic needs.
The EFF, which has joined the litigation as an intervening party, echoed the DA’s concerns. EFF Treasurer-General Omphile Maotwe said the party seeks to overturn the entire fiscal framework, arguing that the legislative process had been compromised. “This application is a necessary and principled intervention to protect the democratic character of Parliament,” said EFF spokesperson Sinawo Thambo.
Godongwana defends tax hike amid political firestorm
In his responding affidavit, Godongwana vigorously defended the VAT increase, warning that suspending it would blow a R13.5 billion hole in the national budget, forcing either severe spending cuts or a spike in borrowing. “The consequences would be severe and far-reaching. Essential services such as education, healthcare, and social protection would be at risk,” he warned.
Godongwana also pushed back against the constitutional challenge, arguing that Section 7(4) of the VAT Act does not grant unilateral power to amend tax legislation, but allows for a conditional and time-bound rate adjustment subject to parliamentary oversight.
The Finance Minister dismissed the EFF’s court submissions as “unsupported and unclear”, and labelled the DA’s case as being based on a “misinterpretation of the law.”
ActionSA accuses DA of political opportunism
The legal challenge has also reignited tensions within the Government of National Unity (GNU). On Monday, ActionSA released a statement accusing the DA of political opportunism, alleging that its Deputy Finance Minister, Ashor Sarupen, had direct involvement in drafting the budget — including the VAT increase.
“Through a damning parliamentary reply, ActionSA can confirm that Sarupen was intimately involved in the budget process, including the initial proposal for a 2% VAT hike and its later revision,” the party said. “The DA is now cynically weaponising this same VAT hike to score political points and expand its influence within the GNU.”
ActionSA, which supported the ANC in passing the 2025 budget, accused the DA of prioritising “extortionist power plays” over the financial wellbeing of South Africans.
Court outcome could reshape budget process
As political tensions mount, all eyes will be on Tuesday’s court proceedings, which could set a precedent for how budget decisions — particularly those affecting taxation — are scrutinised and approved.
A DA delegation is expected to attend the hearing and address the media outside court. The outcome of the case could have sweeping implications for government revenue, service delivery, and the already fragile alliance among GNU partners.
The Western Cape High Court is expected to deliver a decision on the urgent application within days.