DA files supplementary affidavit to block the proposed VAT hike

The Democratic Alliance (DA) has filed a supplementary affidavit in the battle against VAT to block the ANC’s proposed 0.5% hike.

The official opposition filed the application in the Western Cape High Court late on Friday night.

This is despite Finance Minister Enoch Godongwana’s midnight statement on Thursday and an official gazette that VAT would no longer be increased and that the hike would be reversed.

The DA took the decision just hours after meeting with ANC leaders about the VAT hike.

‘Legal developments on VAT’

DA Federal Council Chairperson Helen Zille said there have been “important legal developments on the VAT matter” that required the party to file the supplementary affidavit.

“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.

“The Fiscal Framework — including the VAT increase — was adopted by the Finance Portfolio Committee on 1 April and then by Parliament on 2 April. Therefore, only a court order can now stop the VAT increase from coming into force on 1 May,” Zille said.

ALSO READ: Treasury reverses proposed VAT hike, will remain at 15%

DA affidavit

In the 59-page affidavit, the DA argued that the dispute between the DA and the minister has not been resolved.

“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.”

Zille said the court must specifically issue an order to stop the VAT increase, on the basis that the Fiscal Framework was unlawfully adopted in both the Finance Portfolio Committee and Parliament itself.

“This is what the DA’s supplementary affidavit seeks from the court. The respondents (the Minister and the Speaker) must file their replying affidavits today.”

Preventing VAT hike

In the affidavit,  the DA also argued that, even if the High Court sets aside the fiscal framework, which Parliament now agrees it should, it won’t prevent the VAT increase from kicking in next week.

“The SA Revenue Service’s apparent view to the contrary is plainly wrong. Its advice to vendors – which contradicts the minister’s own position – creates further legal confusion,” the DA said in the affidavit.

“The minister also accepted that once the increase goes into effect on 1 May 2025, it will be impossible to undo. Consumers will not be able to recover the increased taxes paid by them pursuant to the Minister’s  announcement.”

ALSO READ: EFF calls for ‘apartheid tax’ counter instead of VAT hike [VIDEO]

Fiscal framework

The official opposition also wants the Western Cape High Court to order that Godongwana pay 50% of its costs, including the costs of three counsel.

The DA said the “fiscal framework remains valid”.

“Parliament has not rescinded or amended it [which can only be done by both Houses sitting in plenary] and has no plan to do so before 29 April 2025, when this court has indicated it will give judgment.

“The fiscal framework must be declared unlawful and constitutionally invalid by this court as section 172(1)(a) of the Constitution requires,” the DA said in the affidavit.

Further affidavits

The DA affidavit also acknowledged that the party has no right to submit further affidavits after the matter has been heard, adding that the draft affidavit was sent to all parties on Friday, 25 April.

“The EFF and Parliament consented. Sars did not object,” the DA said.

Zille said the DA, therefore, awaits the Court’s ruling in this matter.

VAT rate

The VAT rate was scheduled to rise to 15.5% on 1 May, but growing political and public pressure placed Godongwana under strain to abandon the proposed increase.

Treasury said the initial proposal for a VAT increase was motivated by the urgent need to restore and replenish the funding of “critical frontline services that had suffered reductions necessitated by the country’s constrained fiscal position.”

ALSO READ: Godongwana gives notice to table new bill to reverse VAT hike