High stakes as DA and EFF unite to challenge upcoming VAT hike in the Western Cape High Court

Source: GCIS. Finance Minister, Enoch Godongwana.

The DA, with support from the EFF, is challenging the hike’s legality, following its announcement by Finance Minister Enoch Godongwana in last month’s budget speech.

The DA contends that the 0.5 percentage point VAT increase will harm the economy, placing added strain on already struggling South African households. The party argues the hike will drive up the cost of living and hit the poor and vulnerable the hardest.

The DA’s legal challenge targets the adoption of the 2025 Fiscal Framework and Revenue Proposals, which incorporate the VAT increase.

Constitutionality under scrutiny

The party contends that the decisions made by the National Assembly and the National Council of Provinces (NCOP) were "fundamentally flawed" and "unlawful."

The DA has questioned the constitutionality of section 7(4) of the VAT Act, which empowers the Minister of Finance to adjust the VAT rate. In his responding papers, Godongwana argued that the DA's challenge is "misdirected" and rests on a "fundamental misinterpretation" of the law.

The EFF has applied to join the legal challenge, arguing that it is essential to safeguard Parliament’s democratic integrity and to prevent the processes governing the allocation of public resources from being reduced to unlawful and illegitimate procedures.