DA and EFF challenge VAT increase in Western Cape High Court

The Western Cape High Court will today hear an application by the DA and the EFF to interdict the VAT increase scheduled to come into effect on May 1 and also set aside the fiscal framework report passed by Parliament last month.

Speaking on the steps of the court in Cape Town, DA chief whip George Michalakis said they challenge the VAT unilaterally imposed by Finance Minister Enoch Godongwana.

“We are also challenging the procedural legality of the fiscal framework that was passed last month in Parliament by the ANC and smaller parties,” Michalakis said.

He added that they wanted the court to decide whether Godongwana can announce VAT increase before Parliament has ratified it and whether he can do so without Parliament approving it.

“The minister exercising powers to impose tax laws before they are approved by Parliament strikes at the heart of the principle of the separation of powers. The Law making authority lies with Parliament.”

Michalakis added that they would argue in court that the procedure followed to adopt the fiscal framework, on which all money bills must follow, was flawed and should be overturned.

“Should we be successful it will mean the process might start anew,” he said.

Michalakis said the court case was not only about VAT increase and fiscal framework but about the ability of individuals to feed their families, to pay their bills and to find a job.

“We have never been in a situation where the budget has been challenged and this is good for our democracy. This is what you would expect from a Parliament that has emerged from 30 years of being rubber-stamp and all challenges that go along with it,” he said, adding that the DA was at the forefront of protecting democratic institutions and its processes.

Michalakis said a tax increase of any kind will affect everyone and the poorest would suffer first.

“Instead of putting a burden on South Africans, including taxing the poor even more, we need to find other ways to fund our schools and hospitals.

“We need to cut wasteful spending. We need to review the manner we spend our budget and we need to make sure everything we spend on focuses on growing the economy and creating jobs. An increase in VAT is not the answer,” Michalakis said.

DA federal chairperson Ivan Meyer said VAT was a regressive tax and was more pain onto the people, the poor and the working class.

“A VAT increase is a clear sign that the ANC is a government that does not care for South Africans. VAT increase is a sign that we have a government that is out of touch with the people,” Meyer said.

DA spokesperson on finance Mark Burke said they were opposed to going down the ANC road that would lead to nowhere.

“We are opposed to a dilapidating and bulldozing budget that will lead to further poverty as a result of taking money from people who can’t afford it and giving it to people who don’t know what to do with it,” Burke said.

However, he said the DA was not opposed to the budget under all conditions.

“The DA was in favour of a budget to focus on infrastructure investment, no further bailouts to failing state owned enterprises … We are opposed to the ANC VAT-based budget,” he said.

mayibongwe.maqhina@inl.co.za