DA and EFF Challenge VAT Increase in Court:
Next week, the Western Cape High Court will consider an urgent application from the Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) aimed at halting the impending increase in Value-Added Tax (VAT).

This application, filed earlier in April, questions the legality of the VAT hike announced in March as part of the revised fiscal framework. The parties are asking the court to invalidate the decisions made by the National Assembly and the National Council of Provinces (NCOP) that approved a committee report endorsing these fiscal changes.

An Intense Legal Confrontation Awaits

As South Africa’s fiscal policy comes under scrutiny, the DA and EFF are gearing up for a pivotal legal battle in the Western Cape High Court on Tuesday, April 22, 2025.

Their urgent application aims to prevent a 0.5 percentage point increase in VAT, set to take effect on May 1, 2025. This increase, part of a broader fiscal strategy introduced by Finance Minister Enoch Godongwana in March, has faced strong opposition from both parties, who argue that it is unfair and unlawful for everyday South Africans.

The legal issue centers on the procedural elements of the VAT increase. The DA and EFF contend that Parliament neglected crucial steps in adopting the 2025 Fiscal Framework and Revenue Proposals.

They are urging the court to annul the National Assembly and NCOP decisions that supported the committee report facilitating the tax adjustment. Additionally, the DA seeks a court ruling declaring both the VAT Act and the proposed increase unconstitutional.

Perspectives from the Opposition

The DA has been vocal about its stance. Party spokesperson Dominique Jeftha stated, “The Democratic Alliance’s urgent court application to interdict the pending VAT increase will be heard in the Western Cape High Court on Tuesday, April 22, 2025. Our leadership delegation will be present for the proceedings.

” She underscored that the party perceives the VAT increase as an extra burden on South Africans already grappling with rising living costs, accusing the government of ignoring alternative budget-balancing strategies.

On the other hand, the EFF frames the issue as one of principle. National Spokesperson Sinawo Thambo expressed strong views, asserting, “Parliament cannot continue to function merely as a rubber stamp for the executive. The ruling party has long manipulated the legislative process, using its numerical advantage to pass budgets without following proper procedures.” The EFF’s court submission echoes this sentiment, arguing that the adoption of the fiscal framework contravened the Money Bills Amendment Procedure and Related Matters Act of 2009, a law designed to ensure transparency in tax and budgeting processes.

Government’s Counterargument:

It’s Too Late for Reversal, Finance Minister Enoch Godongwana has firmly refuted the claims made by the DA and EFF. In his response to the court, he argued that their application comes too late to prevent the VAT increase. He noted that the 0.5% hike has already been finalized following approval from both houses of Parliament for the fiscal framework. Godongwana dismissed allegations of illegality, asserting that all necessary procedures were appropriately followed.

The VAT increase is part of a gradual plan to elevate the rate from 15% to 16% over two years—0.5% in 2025/26 and another 0.5% in 2026/27. This initiative aims to generate an additional R28 billion in the next year and R14.5 billion in the subsequent year, funds that the government considers crucial for financing education, healthcare, and public transport. Godongwana has framed this as a difficult yet essential decision, questioning, “Do we close schools, hospitals, or clinics? That’s the reality we’re facing.

” However, the opposition disputes this rationale, with the DA pointing to wasteful expenditures—such as inflated government rents and excessive public sector salaries—as areas ripe for savings. The EFF has labeled the VAT increase a “tax on the poor,” arguing that it disproportionately impacts low-income households, who spend a larger share of their income on goods subject to VAT.

The Significance of the VAT Increase

While a 0.5% VAT increase may appear minor, its implications could be significant. For the average South African, it could lead to higher prices for everyday goods like bread and fuel. Small businesses, already operating on tight margins, may also feel the effects as consumers reduce spending. In contrast, the government argues that the increase is a necessary financial measure for a state grappling with a mounting budget deficit.

This is not the first time VAT has sparked controversy. Following the 2018 increase from 14% to 15%, widespread protests erupted, with critics claiming it worsened inequality, while supporters argued it was essential to close a revenue gap. As of 2025, public opinion remains polarized, with social media platforms like X reflecting a divided sentiment—some view the increase as a prudent economic strategy, while others see it as detrimental to struggling families.

Examining the Legal Arguments

At the heart of the DA and EFF’s case is the Money Bills Act, which outlines strict requirements for tax changes in Parliament, including sufficient debate and committee scrutiny. The opposition argues that the Standing Committee on Finance hastily approved the fiscal framework report without proper examination. They are relying on the court to agree that this procedural oversight invalidates the VAT increase.

Conversely, the government maintains that the process met legal requirements. Godongwana’s legal team is expected to argue that the opposition’s grievances stem from policy disagreement rather than procedural flaws. They are likely to inform the court that decisions of this nature fall within the jurisdiction of Parliament and the executive, not the judiciary.

Legal experts suggest that the outcome could go either way. Should the court find evidence of procedural irregularities—such as insufficient debates or dismissed submissions—it may side with the DA and EFF. Conversely, if it concludes that the process was legally sound, the VAT increase will proceed as planned. Regardless of the outcome, the ruling could set significant precedents regarding the management of fiscal laws in South Africa.

Implications for South Africans

For the average citizen, this court case extends beyond political disputes; it directly influences their finances. A 0.5% VAT increase may only slightly raise grocery bills, but over time, the cumulative effect could be substantial. Vulnerable groups, including pensioners, low-wage workers, and single parents, are particularly vulnerable. Community organisations have begun voicing concerns, with some planning protests if the increase is implemented.

Businesses are also closely monitoring the situation. Retailers caution that they may need to pass on the additional costs to consumers, potentially dampening sales. Some economists warn that decreased consumer spending could impede economic growth, while others argue that the additional revenue could stabilize the economy in the long run, enabling funds for job creation.

Moreover, there is a political aspect to consider. The DA and EFF are part of the Government of National Unity (GNU), a precarious coalition with the ANC and smaller parties. This legal challenge highlights divisions within that alliance, especially concerning economic policies. A victory for the opposition could empower them to challenge more GNU initiatives, while a defeat might reinforce the ANC’s dominance over fiscal matters.

Anticipation for April 22, 2025

When the Western Cape High Court convenes next Tuesday, the focus will be on the arguments presented. The DA and EFF are likely to highlight specific instances where they believe Parliament fell short—such as expedited committee meetings or disregarded objections. They will assert that the VAT increase is not just poor policy but also illegally enacted.

Godongwana’s legal representatives will counter, defending both the process and the necessity of the tax increase. They may point to procedural aspects—like the timing of the application—to argue that it is too late for judicial intervention. With the VAT increase looming just days away, the urgency is evident.

Although the judge’s ruling may not be immediate, given the case’s significance, a decision could be expected within days. If the DA and EFF succeed, the VAT increase might be suspended or completely annulled, compelling the government to reassess its strategy. Conversely, if they do not prevail, South Africans will face higher costs starting May 1.

A Broader Perspective: Democracy and Accountability
This case transcends the VAT increase

It concerns the accountability mechanisms in South Africa. The DA and EFF are questioning whether Parliament can be held responsible for implementing significant changes. A victory for them would signify that the courts can act as a check on legislative overreach, while a defeat might encourage the government to exploit its majority further in the future. For now, South Africans await the outcome, which will not only affect their finances but also their trust in their leaders. As one user on X remarked, “VAT up, hope down—when will they listen to us?” This question may find its resolution in the Western Cape High Court next week.