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Court battle unfolds as DA and EFF unite against controversial VAT increase

Court battle unfolds as DA and EFF unite against controversial VAT increase
DA and EFF members during the court hearing of an urgent application to halt a VAT increase at Western Cape High Court on April 22, 2025 in Cape Town, South Africa. The Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) are challenging the legality of the hike, announced as part of the revised fiscal framework. (Photo by Gallo Images/ER Lombard)
Victoria O’Regan
By Victoria O’Regan
22 Apr 2025
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The DA and EFF’s challenge to Finance Minister Enoch Godongwana’s looming VAT increase is being heard in the Western Cape Division of the High Court, with the DA accusing the ANC of pushing a ‘tone-deaf’ Budget that will disproportionately affect the poor.

The DA has said an increase in the value-added tax (VAT) rate would worsen South Africa’s cost of living crisis, accusing the ANC of not caring about the poor when it “decided to steamroll a tone-deaf Budget”. 

Speaking to reporters outside the Western Cape Division of the High Court on Tuesday morning, 22 April 2025, the DA’s Federal Chairperson, Dr Ivan Meyer, said: “The ANC doesn’t care about the poor, the working class and the general South African public.

“The Government of National Unity (GNU) has three priorities. First, create inclusive economic growth. The VAT (increase) will erode inclusive economic growth. The second priority of the GNU is to reduce poverty. This VAT increase will increase poverty. The third priority of the GNU is to build a capable state. A capable state never punishes the poor,” said Meyer. 

Read more: VAT court challenge stays; Treasury may drop increase: Three future GNU scenarios for SA

The high court is hearing oral arguments on Tuesday on the DA and EFF’s application to halt the implementation of the 0.5 percentage point VAT increase on 1 May, as announced by Minister of Finance Enoch Godongwana in his Budget speech on 12 March. 

Both parties opposed the National Assembly and National Council of Provinces’ adoption of the fiscal framework on 2 April, claiming that the marathon session of Parliament’s finance committee the previous day was procedurally irregular and its decisions unlawful.  

VAT From left: EFF treasurer-general Omphile Maotwe, DA national spokesperson Karabo Khakhau and DA finance spokesperson Mark Burke during the hearing of an urgent application to halt a VAT increase in the Western Cape High Court on 22 April 2025. (Photo by Gallo Images/ER Lombard)



The framework passed through Parliament with the support of the ANC and parties outside of the GNU, including ActionSA and Bosa, on condition that there be talks to explore alternatives to the VAT hike.

Speaking to reporters outside court, the treasurer-general of the EFF, Omphile Maotwe, said the parties who voted with the ANC to support a VAT increase “will realise they were actually made fools”. 

She added that the ANC still needed to “stomach the fact that they did not win a majority”. 



On 3 April, the DA filed an urgent application in the Western Cape Division of the High Court, challenging the legality of the process in Parliament to adopt the fiscal framework, and Godongwana’s powers under section 7(4) of the VAT Act. 

Read more: How the DA and EFF plan to fight the VAT hike and Budget process in court

In Part A of its application, the party is seeking orders, first, setting aside the “fundamentally flawed” decisions of both Houses of Parliament to adopt the fiscal framework and sending the framework back to the standing committee on finance and select committee on finance for reconsideration; and second, suspending the implementation of Godongwana’s decision to hike VAT on 1 May pending the determination of Part B of its application. 

The DA wants the court to declare the National Assembly and National Council of Provinces’ decisions to adopt the framework invalid and to set them aside. But the relief sought in respect of the VAT increase is interim, pending the final determination of Part B.

In Part B of its application, the DA is asking the court to declare the finance minister’s authority under section 7(4) of the VAT Act unconstitutional, as it permits the executive to raise taxes without Parliament’s approval.

The EFF later applied to join the DA’s case. 

The party is asking the court to suspend the finance committee’s report on the fiscal framework and to suspend the National Assembly and National Council of Provinces’ adoption of the framework, pending the determination of Part B of its application.  

Godongwana, in his responding affidavit, has defended his decision to increase the VAT rate in terms of section 7(4) of the act, arguing that should the VAT increase be suspended, the consequences for South Africa would be “severe and far-reaching”. 

DA federal chairperson Dr Ivan Meyer speaks to the media outside the Western Cape Division of the High Court on Tuesday, 22 April, before the DA’s hearing in its case against the VAT increase. The party is calling for an interdict to prevent the 0.5 percentage point VAT hike from being implemented on 1 May. (Photo: DA / X)



DA and EFF members attend the hearing of an urgent application to halt a VAT increase in the Western Cape High Court on 22 April 2025. (Photo: Gallo Images / ER Lombard)



“The Democratic Alliance is before court today to challenge the increase of VAT to 15.5% (that) the minister of finance unilaterally imposed. Along with that, we are also challenging the procedural legality of the fiscal framework that was passed last month in Parliament by the ANC and smaller parties,” the DA’s Chief Whip George Michalakis told reporters. 

“The question that we would like the court to answer is whether the minister can announce a VAT increase that finds effect on 1 May, before Parliament has ratified this; whether he can do this without Parliament, the representatives of the people, approving it. 

“A minister exercising powers to impose tax laws before they are approved by Parliament strikes at the heart of the principle of separation of powers. The lawmaking authority lies with Parliament. Along with that we’re arguing that the procedure followed to adopt the fiscal framework, on which all the money bills that must follow is based, was flawed and should be overturned. Should we be successful, it will in fact mean that the process might have to start anew,” he said. 

The DA’s spokesperson on finance, Mark Burke, stressed the party was “not opposed to a workable Budget”. 

He said the DA had supported a Budget that included infrastructure investment and no new bailouts, “until the ANC decided to steamroll a tone deaf budget against our (the DA’s) advice”. 

The hearings continued on Tuesday afternoon, with Advocate Tembeka Ngcukaitobi arguing the EFF’s case. DM



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