SARS welcomes court ruling suspending May 1 VAT increase

The South African Revenue Service (SARS) has welcomed a court order suspending the planned 0.5% Value Added Tax (VAT) increase that was set to take effect on 1 May 2025.

The suspension comes after the Western Cape High Court set aside Parliament’s approval of the fiscal framework enabling the hike.

SARS Commissioner Edward Kieswetter says the ruling provides critical clarity for the administration of the VAT Act and avoids disruption for businesses and consumers.

“The order allows SARS to administer VAT efficiently while protecting taxpayers,” Kieswetter states, emphasising that vendors have “no legal basis” to implement the higher rate.

SARS will monitor compliance, though Kieswetter expressed confidence in vendors’ ability to adjust swiftly.

‘Victory for South Africans’

Meanwhile, the Democratic Alliance (DA) has described the Western Cape High Court’s decision to officially suspend the VAT increase as a victory for South Africans.

The party says this ruling ensures that any changes to the VAT rate must be properly approved by Parliament before taking effect, adding that it set aside the unlawful support lent to the VAT hike by a number of parties.

“The DA is very pleased that we have managed to reach an out-of-court settlement; it has been made an order of court to stop the VAT increase on the 1st of May,” says DA Federal Council Chairperson Helen Zille.

The court also ruled to set aside the resolution of the National Assembly adopting the report of the Joint Standing Committee on Finance on the Fiscal Framework and Revenue proposals adopted earlier this month.

Finance Minister Enoch Godongwana has been ordered to pay 50% of the legal costs, including costs to two senior counsel. National Assembly Speaker Thoko Didiza and National Council of Provinces Chairperson, Refilwe Mtshweni-Tsipane have also been ordered to pay 50% of the legal costs, including costs to two senior counsel.

[WATCH] The Western Cape High Court has suspended the VAT increase set for 1 May 2025. For more on these developments, SABC News International Editor Sophie Mokoena. pic.twitter.com/sgeFVlANF0

— SABC News (@SABCNews) April 27, 2025