DA and EFF Take 2025 VAT Hike to Court in Last-Minute Bid to Block Tax Increase

South Africa’s controversial 2025 VAT hike is now in the courtroom spotlight. The Democratic Alliance (DA), with the backing of the Economic Freedom Fighters (EFF), is making a last-ditch legal effort to block the increase before it takes effect on Thursday, 1 May 2025—Workers’ Day, no less.

The Western Cape High Court is set to hear the urgent application today, Tuesday 22 April 2025, challenging the legality and constitutionality of the proposed increase.

Why Is the 2025 VAT Increase Being Challenged?

The challenge targets the 2025 Fiscal Framework and Revenue Proposal, with specific focus on amendments to Section 7(4) of the VAT Act. The DA and EFF argue that the Minister of Finance, Enoch Godongwana, does not have the authority to increase VAT unilaterally without full legislative approval.

They further claim that raising VAT—particularly during a period of high inflation and rising food prices—will place a disproportionate burden on poor and vulnerable households, many of whom depend on SASSA grants to survive.

“The 2025 VAT increase is an unjustified burden on already struggling households,” said the DA in a statement. “It will escalate the cost of living and deepen inequality.”

EFF Joins the Legal Action

The EFF also submitted its support to join the interdict application, framing the move as a defense of South Africa’s constitutional order and democratic oversight of public funds.

“This is a principled intervention to protect the democratic character of Parliament,” said EFF spokesperson Sinawo Thambo.

Godongwana Fires Back

Minister Godongwana has rejected the legal challenge as “misdirected”, claiming the DA and EFF have misinterpreted the law.

According to the Minister, the VAT adjustment is temporary and conditional, with provisions allowing him to adjust the rate for up to 12 months, provided that Parliament enacts the change into legislation thereafter.

“Stopping the VAT increase would blow a R13.5 billion hole in the budget,” warned Godongwana. “That means either more borrowing, job cuts, or reductions in essential services.”

More Than a Tax Debate

Beyond the legal battle, this interdict could shake the foundations of the Government of National Unity (GNU). The ANC’s failure to secure a majority in the 2024 elections means coalition dynamics are fragile, and the DA’s legal opposition could put strain on the GNU’s policy cohesion.

What Happens Next?

The court’s ruling will determine whether the 1 percentage point VAT hike—planned to be implemented incrementally from 2025 to 2026—will go ahead as scheduled. If halted, it could spark further policy and fiscal uncertainty.

Should the Court Overturn the 2025 VAT Increase?

This case raises big questions:

• Can the executive branch raise VAT without parliamentary approval?

• Is a VAT hike the right approach in a time of economic pressure?

• How should the state balance revenue needs with social equity?

The outcome of today’s hearing could reshape not just South Africa’s fiscal policy—but also the political alliances that define it.

{Source The South African}

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