Court halts VAT hike

PROPOSED: 'RATE MUST BE PROPERLY APPROVED BY PARLIAMENT'

- Bloomberg

The Western Cape High Court has ordered that a proposed increase in the Value-Added Tax (VAT) rate be suspended, formally scrapping the measure.

The ruling on Sunday brings to an end a dispute between the two largest parties in the government of national unity (GNU) over the revenue-raising measure.

Finance Minister Enoch Godongwana announced on 23 April that the 0.5-percentage point increase in the VAT rate that was due to take effect on 1 May wouldn't be implemented.

"The court's decision ensures that any changes to the VAT rate must be properly approved by parliament before taking effect, and sets aside the unlawful support lent to this VAT hike by a number of parties," the DA, which brought the case to court, said.

It was supported by the EFF in the court action.

The order will enable Godongwana to table the budget instruments afresh, Thoko Didiza, the speaker of parliament, said.