COURT RESERVES JUDGMENT ON VAT INCREASE

'Power to tax can't be delegated to executive'

- MAYIBONGWE MAQHINA

THE Constitution does not permit Parliament to delegate the power on decisions regarding tax to its executive, the Western Cape High Court heard in the DA and EFF’s application to interdict the VAT (Value Added Tax) increase from taking effect on May 1.

This was an argument advanced by the DA's legal representative Advocate Michael Bishop during the urgent application yesterday, which seeks to additionally set aside the fiscal framework report adopted by Parliament.

"The power to tax can't be delegated to the executive," Bishop told the court.

Bishop told the full bench that the case before court was about who decides to increase the VAT rate and whether Parliament acted lawfully.

"It can only be increased after Parliament does it after following a lawful process. It is about making sure democratically elected public representatives of South Africa decide that issue, not the minister."

Bishop said the announcement by Finance Minister Enoch Godongwana to increase the VAT rate by 0.5% in 2025-26 was premised on the fact that the minister determines the funding needs.

"That is not a decision for the Minister or the National Treasury. It is a decision for Parliament to make. The decision-making role is always with Parliament, how much to raise and how to raise and spend it," he said.

Bishop told the court that the harm caused by a VAT increase, could not be undone.