Democratic Alliance
By Thabo Mosia
The Democratic Alliance (DA) has launched an urgent court bid to block the 0.5% value-added tax (VAT) hike, filing an application in the Western Cape High Court on Thursday, 03 April 2025. The party is pushing to suspend the tax increase, set to take effect from 01 May 2025, arguing that it’s unconstitutional and unfairly burdens South Africans already struggling with rising costs. This move comes just a day after Parliament passed the 2025 fiscal framework with 194 votes in favour, locking in Finance Minister Enoch Godongwana’s plan to raise VAT in phases. The DA’s legal challenge has sparked fresh debate about the government’s tax policies and the fragile unity within the Government of National Unity (GNU).
DA Takes VAT Fight to Court
On Thursday morning, the DA announced its urgent application at a briefing in Cape Town, outlining its plan to stop the VAT hike in its tracks. The party wants the Western Cape High Court to suspend the implementation of the 0.5% increase until a full review of its legality is complete. “We’re seeking an interdict to stop SARS from implementing the VAT hike on 1 May,” said DA federal council chairperson Helen Zille, addressing the media. She stressed that the party is not only challenging the hike itself but also the broader powers that allow the Finance Minister to raise VAT without proper parliamentary oversight.
The DA’s court papers ask for two key outcomes. First, they want the court to declare the National Assembly and National Council of Provinces (NCOP) resolutions on the 2025 fiscal framework unconstitutional and invalid. Second, they’re targeting Godongwana’s announcement of a phased VAT increase—starting at 0.5% this year and rising to 1% by 2026—as unlawful. The party argues that these decisions sidestep the democratic process, leaving ordinary South Africans to bear the brunt of higher prices.
Why the DA Is Fighting the VAT Hike
The DA’s legal challenge hinges on its belief that the current VAT Act gives the Finance Minister too much power. “The second part of these papers is to get Section (7.4) of the Vat Act declared unconstitutional, because it gives the minister the power to enforce a VAT increase without taking it through Parliament,” Zille explained. She argued that this section undermines the role of elected representatives in deciding how taxes are imposed, a cornerstone of South Africa’s democracy.
The party also claims the VAT hike will hit the poorest the hardest. With the cost of living already soaring—think higher food prices, fuel costs, and electricity tariffs—the DA says an extra 0.5% on VAT will push many families deeper into financial strain. They’ve accused the African National Congress (ANC) and its smaller GNU partners, like ActionSA, of ignoring these struggles by backing the fiscal framework in Parliament on Wednesday. The vote saw 194 MPs in favour and 182 against, a narrow win that exposed deep divisions within the coalition.
A Rocky Road for the GNU
The DA’s court bid has reignited questions about its future in the GNU, a coalition formed after the ANC lost its majority in the 2024 elections. While the DA has been a key player alongside the ANC, tensions over the budget have strained their partnership. Zille downplayed talk of an immediate exit, saying, “It’s still premature.” She added that the party’s federal executive would meet later to decide its next steps. “We’ll weigh all our options carefully,” she said, leaving the door open to either staying or walking away.
The ANC, for its part, has stood firm. After Wednesday’s vote, party leaders said the DA must decide if it wants to remain in the GNU, hinting that the coalition could survive without them by leaning on other partners or opposition parties like the EFF or MK Party. But the DA’s legal challenge could force a reckoning, testing whether the GNU can hold together amid such public policy clashes.
The Budget Battle: How We Got Here
The 2025 fiscal framework, tabled by Godongwana on 12 March 2025, sparked controversy from the start. His original plan proposed a 2% VAT hike, jumping from 15% to 17%, but fierce pushback from the DA and others forced a rethink. After weeks of wrangling, he scaled it back to a phased increase: 0.5% in 2025/26 and another 0.5% in 2026/27, bringing VAT to 16%. The revised plan aims to raise R28 billion in 2025/26 and R14.5 billion the following year to fund health, education, and transport projects.
Despite the compromise, the DA refused to budge, arguing that any VAT increase is a step too far. They’ve called for spending cuts instead, pointing to wasteful government expenditure—like overpriced rentals and bloated public sector wages—as areas to trim. Godongwana, however, has defended the hike, saying it’s the only way to balance the budget without slashing critical services. “Do we close schools, hospitals, or clinics? That’s the choice,” he told MPs earlier this month.
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