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Legally Halting the VAT Increase

Dear Editor

There have been important legal developments on the VAT matter, that required the Democratic Alliance to file a supplementary affidavit with the Western Cape High Court late last 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.

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.

Following the DA’s bid to interdict the VAT increase, heard in the Western Cape High Court on 22 April, the Minister backed down, issuing a press statement to this effect. He 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.

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.

We therefore await the Court’s ruling in this matter.

Regards

Helen Zille
DA Federal Council Chairperson

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