The DA has taken its legal action against the looming VAT increase further by filing a supplementary affidavit asking the court to stop the hike which is set to take effect on May 1.
Following claims that Finance Minister Enoch Godongwana had purportedly offered a settlement, which never materialised, the DA is now seeking a “specific” court order from the Western Cape High Court to prevent the VAT rise.
This comes as the MK Party filed a motion of no confidence in Godongwana in Parliament despite the Constitution providing for only the Cabinet and the President.
DA Federal chairperson Helen Zille said on Saturday there have been important legal developments on the VAT matter that required the DA to file a supplementary affidavit with the Western Cape High Court late on Friday night.
“The supplementary affidavit is necessary because, despite the developments of the past week, the VAT increase will still come into effect on 1 May, unless the court specifically issues an order to prevent this,” Zille said.
She also said only a court order can now stop the VAT increase from coming into force on 1 May after the fiscal framework, including the VAT increase, was adopted by the finance portfolio committee and Parliament on April 1 and 2 respectively.
Zille noted that Godongwana had issued a statement after the hearing of their application to interdict the VAT increase and also gazetted his intention to introduce a new Bill to Parliament, revising the fiscal framework without the VAT increase.
“However, this is not enough to prevent a VAT increase coming into effect on 1 May, because the new bill will not yet have been adopted by Parliament.
“The court must specifically issue an order to stop the VAT increase, on the basis that the fiscal framework was unlawfully adopted in the both the finance portfolio committee and Parliament itself,” she said.
Zille added that Godongwana and Didiza were given until Saturday to file their replying affidavits.
Contacted for comment, Zille confirmed that there was no settlement reached between the lawyers of the DA and Godongwana.
“No, that is all I can say,” she said when asked for comment.
In the affidavit filed with court, DA’s attorney Shannon Solomon said Godongwana introduced a new bill that replaced the VAT increase and SARS has advised vendors that cannot reverse changes to the hike to continue charging until May 15.
Solomon also said National Assembly Secretary informed chief whips and parties that a court outcome was awaited on deciding the way forward on the VAT increase and the fiscal framework.
Parliament’s attorneys wrote to the court indicating that Parliament may rescind the resolution adopted on the fiscal framework and consider a new or amended one if the court set aside the adopted framework.
“Although the minister has indicated that he no longer supports a 0.5% VAT increase, as a matter of law the actions he has taken will not prevent the increase coming into effect on 1 May 2025.”
Solomon added that even if the court set aside the fiscal framework, that alone will not prevent VAT increase coming into effect.
“From 1 May 2025, unless and until Parliament in fact adopts the minister’s now proposed bill, the VAT rate will be 15.5%, and any subsequent amendment cannot practically reverse that.”
Solomon said unless the court acted, an unconstitutional and irreversible VAT increase will be imposed and that Godongwana has taken no steps to prevent the increase despite no longer supporting the increase.
The turn of events took place as the MK announced that it has formally submitted a motion of no confidence in Godongwana to the National Assembly Speaker Thoko Didiza.
The party’s spokesperson Nhlamulo Ndhlela said the motion of no confidence followed their call for the resignation of Godongwana over his reckless mishandling of the VAT matter.
“This action underscores the MK Party’s commitment to holding those in positions of public trust accountable for decisions that impact the lives of millions of South Africans. Minister Godongwana’s failure to provide clarity and leadership on the VAT issue has sowed confusion in the markets, panic among the poor, small businesses and further entrenched uncertainty in an already fragile economy,” Ndhlela said.
The MK Party has since called on MPs to support its motion of no confidence when it is brought before the House.
Neither Ndhlela nor the party’s media and communications head Sipho Tyira could be reached to clarify the basis of their motion of no confidence against Godongwana.
The constitution only provides for a motion of no confidence in the Cabinet and the President.
The MK Party’s motion comes as some have called for Godongwana’s resignation.
The EFF said Godongwana failed to comply with legal and constitutional obligations governing the budget process.
Neither Godongwana’s spokesperson nor President Cyril Ramaphosa’s spokesperson Vincent Magwenya nor the ANC could be reached for comment.
However, Build One South Africa leader Mmusi Maimane took to social media, X to defend the minister.
“Any calls for the Minister of Finance to resign are ludicrous. We must affirm an uncaptured Treasury. Having held public hearings on VAT, the minister has responded to the people and the party parliamentary process,” Maimane said.
