Court's Suspension Of Vat Increase Affirms Decision Already Taken By Godongwana: Anc

The African National Congress ANC says the Western Cape high court order suspending the value-added tax VAT increase affirms a decision already taken by Finance Minister Enoch Godongwana.

In its order on Sunday 27 April, the court also set aside Parliaments adoption of the budgets fiscal framework .

In a statement afterwards, the ANC said parties involved in the matter had agreed unanimously on the order.

The parties included Godongwana, Democratic Alliance DA, Economic Freedom Fighters EFF, National Assembly Speaker, National Council of Provinces NCOP Chairperson and the South African Revenue Service Commissioner.

The order serves to provide legal certainty affirming the decision already taken by the Minister of Finance to reverse the proposed VAT increase of 0.5 percentage points which had been scheduled to come into effect on the 1st May 2025, the ANC said.

Godongwana announced his decision to reverse VAT hike last week. However, there was uncertainty on whether or not Parliament would be able to pass a Rates Bill reversing it before 1 May.

This seemingly formed the basis for the parties reaching a settlement that included setting aside the fiscal framework.

Setting aside the framework is a result of the Ministers decision to reverse the increase in VAT thereby amending the fiscal framework, the ANC said.

The court has made no decision on the merits of the application that had been brought before it by the applicants. 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, it added.

Following the order, National Assembly Speaker Thoko Didiza informed chief whips of political parties that Godongwana will now table the budget instruments afresh.