The Western Cape High Court has reserved judgment in the Democratic Alliance (DA) and Economic Freedom Fighters (EFF)’s urgent application to halt a VAT increase, set to kick-in on the 1st of May.
Both parties are challenging the legality and constitutionality of the 50 basis point Value-Added Tax hike, adopted during the 2025/2026 Budget last month.
Finance Minister Enoch Godongwana has always stood firm that Section 7(4) of the VAT Act empowers him to make a temporary VAT rate adjustment.
Advocate Mahlape Sello, representing the Finance Minister, has dismissed that Section 7 (4) of the VAT Act is unconstitutional.
Meanwhile, the CEO of the South African Institute of Tax Professionals, Keith Engel, says Section 7(4) should be read and understood in context.
Urgent court application to halt VAT increase: Keith Engel
The DA wants the court to make a final order scrapping the increase in its entirety. It is also calling for a section of the relevant legislation to be struck off completely. The party argues that section 7 (4) of the VAT Act gives the Finance Minister too much power.
Meanwhile, Advocate Karrisha Pillay, who is representing Parliament on the VAT hike court case, says the institution followed all the due processes, which led up to the vote in favour of the adoption of the fiscal framework report on the second of April.
The matter has been reserved by the Western Cape High Court. The court, however, made an undertaking that it will get back to the affected parties by the 29th of this month.
