EFF defends the rule of law against Sars's VAT instructions

Party seeks to safeguard constitutional governance

- OMPHILE MAOTWE

THE Economic Freedom Fighters (EFF) has long warned that under the so-called "Government of National Unity" (an opportunistic marriage between the ANC and the DA), South Africa's fiscal and legal systems would be plunged into chaos.

Giving credence to this are the recent developments around the reversal of the VAT rate increase that have vindicated our warnings while exposing the deep rot and disregard for constitutional order at the heart of this current administration. On April 25, the South African Revenue Service (Sars) issued a media statement addressing the “practical implications” of Finance Minister Enoch Godongwana’s sudden announcement that the VAT rate increase from 15% to 15.5% would be reversed. While Sars claims to offer clarity to vendors and the public, it has demonstrated reckless disregard for the Constitution and the rule of law.

At the core of this debacle is a simple but crucial fact, which is that Parliament has not yet amended the relevant fiscal framework. The Revenue Laws Amendment Bill which deals with reversing the VAT increase is still before Parliament. Until it is passed through the constitutional processes outlined in Section 77 of the Constitution and the Money Bills Amendment Procedure and Related Matters Act, no change to the VAT rate is legally binding. The Finance Minister’s pronouncements, however bold, do not carry the force of the law unless and until Parliament acts.

Sars, on the other hand, an institution meant to be fiercely independent and firmly anchored in the law, has acted as if the Minister's words were sufficient to instruct all VAT vendors to suspend or reverse the VAT adjustment. In doing so, Sars has blurred the line between lawful tax administration and unlawful political expediency. It is not the role of Sars to implement executive whims, as its constitutional duty is to administer tax laws as passed by Parliament.