EFF challenges budget process, calls for reset and VAT clarity

The Economic Freedom Fighters (EFF) filed supplementary court papers in the Western Cape High Court on Saturday to intervene in the legal challenge regarding Parliament’s adopted fiscal framework and revenue proposals.

The political party is taking a stand to defend constitutional principles and protect South Africans from what they consider an unjust VAT increase.

This legal action follows Finance Minister Enoch Godongwana’s sudden reversal of the planned VAT increase.

On Thursday, shortly after midnight, the National Treasury announced that the proposed VAT increase had been canceled and would remain at 15%, ending a two-month dispute over the controversial tax hike.

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EFF’s constitutional concerns on budget

In their court filing, the EFF expressed “deep concerns” about the conduct of the Speaker of the National Assembly and parliamentary secretaries, accusing them of entangling Parliament in partisan politics.

The party maintains that South Africa currently has no lawful budget, arguing that the fiscal framework and revenue proposals were adopted through processes that violate the Constitution and the Money Bills Amendment Procedure and Related Matters Act.

“The only legitimate and practical way forward is a full reset of the 2025 budget process to re-establish constitutional compliance and fiscal legitimacy,” the EFF asserted.

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EFF challenge to Sars commissioner

In addition to the court filing, the EFF sent an urgent letter to South African Revenue Service (Sars) Commissioner Edward Kieswetter questioning the legal basis for the tax authority’s communication regarding the VAT rate adjustment.

EFF National Chairperson and Parliamentary Chief Whip, Nontando Nolutshungu, criticised Sars for creating confusion by allowing two different VAT rates to operate simultaneously until May 15.

“We must further express our alarm at the absurdity of SARS’s pronouncement permitting two VAT rates — 15% and 15.5% — to operate simultaneously until 15 May 2025.

“This reckless allowance not only sows confusion among vendors and consumers but also creates fertile ground for exploitation, price manipulation, and criminality,” Nolutshungu wrote.

Legislative authority questions

The EFF demanded clarification on how Sars could issue binding instructions to VAT vendors without proper legislative processes being completed.

“We seek to understand how such administrative instructions could be issued when Parliament has not yet lawfully repealed or amended the relevant fiscal framework through proper legislative processes,” Nolutshungu stated in the letter.

The party warned that Sars risked undermining public trust by acting on executive announcements rather than properly enacted legislation, cautioning that they reserved the right to pursue legal remedies if Sars failed to provide a satisfactory explanation within 24 hours.

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Godongwana’s VAT reversal

Godongwana’s reversal comes after significant opposition to his planned implementation of an initial 0.5 percentage point VAT increase on May 1, which would have been followed by another 0.5 percentage point increase on April 1 next year.

The National Treasury confirmed that Godongwana would introduce legislation to formally reverse this decision, keeping the VAT rate at 15%.

EFF calls for parliamentary integrity

The EFF urged Parliament to avoid political gamesmanship and prioritise its constitutional obligations.

“Parliament must remember that in terms of Section 44(1)(a)(ii) of the Constitution, the legislative authority to pass money bills resides with the National Assembly, and not with any member of the Cabinet,” the party emphasised in their statement.

The party called for decisive leadership during this critical period, advocating for “a competent, consultative, and transparent Parliament that acts with integrity” and serves the interests of all South Africans, particularly the poor and working class.

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