South Africa faces a last-minute legal showdown over the controversial VAT hike, with Finance Minister Enoch Godongwana’s attempt to scrap the increase now in doubt just days before its implementation. The Sunday Times reports that confusion reigns as the Democratic Alliance (DA) argues only Parliament—not the minister—can reverse the tax change.
In a dramatic move, Godongwana announced Wednesday that the 0.5% VAT increase set for this week would be canceled. However, the DA challenged this in court, filing an affidavit stating: “The DA and Parliament support that position. It is the only plausible reading of section 7(4) of the VAT Act.”
The dispute has plunged the Government of National Unity (GNU) into turmoil, with ANC leaders threatening consequences for the DA’s opposition. Legal experts say the case raises unprecedented questions—if the hike takes effect May 1, reversing it may be impossible, leaving consumers stuck with higher prices.
Key Developments:
- Legal Deadlock: The DA argues Parliament must approve any VAT reversal, making Godongwana’s announcement legally void.
- Race Against Time: Treasury’s draft law aimed to backdate the cancellation, but DA attorney Shannon Solomon called this “meaningless,” as businesses and consumers would already have paid the higher rate.
- Political Fallout: The ANC is rallying smaller parties to secure a parliamentary majority, while insiders suggest Godongwana may drop his court challenge.