In a landmark ruling, the Western Cape High Court has curtailed Finance Minister Enoch Godongwana’s authority to hike the Value Added Tax (VAT) rate without parliamentary approval. The decision, handed down on Thursday, declares unilateral VAT increases unconstitutional, dealing a blow to executive overreach amid South Africa’s fiscal woes.
The case stemmed from a challenge by the Helen Suzman Foundation (HSF), which argued that Section 11(8) of the Value-Added Tax Act—allowing the Minister to adjust rates solo—violates the Constitution’s separation of powers. Judge Denise Fisher agreed, ruling that tax hikes demand democratic scrutiny. “Parliament, not the Minister, holds the purse strings,” she stated, striking down the provision effective immediately.
This comes as Godongwana faces pressure to plug a R60 billion budget shortfall for 2026/27. VAT, currently at 15%, funds essentials like healthcare and grants. Critics, including the DA and Freedom Front Plus, hailed the verdict as a safeguard against “midnight tax grabs” that burden low-income households most. “Ordinary South Africans can’t afford more pain at the till,” said DA shadow finance spokesperson Geordin Hill-Lewis.
Supporters of the old power, like the ANC, warn it ties government’s hands during crises, echoing 2018’s controversial 1% VAT rise from 14% to 15%. Economists predict no immediate rate changes, but Treasury must now seek parliamentary nods—potentially delaying reforms.
For families in Cape Town townships and beyond, this ruling offers breathing room. As inflation bites and loadshedding lingers, it underscores democracy’s role in fiscal fairness. Will Parliament step up, or will political gridlock ensue? Taxpayers watch with bated breath.