The Western Cape High Court has officially suspended the 0.5% Value Added Tax (VAT) increase that was due to come into effect on 1 May 2025.
What the Western Cape court ruled
Although Finance Minister Enoch Godongwana had already announced the cancellation of the hike last week, the court’s ruling ensures that the reversal is properly handled through Parliament.
In simple terms, the court made it clear that even if the minister decided to cancel the VAT increase, that decision cannot be final until Parliament passes a new law confirming the cancellation.
Until that happens, the court order temporarily blocks the hike from taking effect.
This agreement was reached after all parties involved in the case — including the Democratic Alliance (DA) and the National Treasury — met with the judges on Sunday afternoon, 27 April 2025.
The court also cancelled the resolutions that Parliament had previously adopted to push through the 2025 fiscal framework, which included the VAT hike.
Importantly, the court kept the door open for a future legal fight about the bigger issue: whether it is constitutional for a finance minister to change VAT rates before Parliament formally approves them. That battle could be fought at a later stage.
The DA had argued in court that Godongwana’s attempt to raise VAT first and ask Parliament later was not only unconstitutional but would create confusion and harm consumers. They insisted that only Parliament can make decisions about taxes that affect people’s pockets.
In its ruling, the court said suspending the VAT increase now was the only way to make sure that the law was followed correctly.
DA celebrates VAT reversal win
The DA has celebrated the Western Cape court ruling as a victory for ordinary South Africans. Helen Zille, chairperson of the DA Federal Council, said:
“This decision ensures that any changes to the VAT rate must be properly approved by Parliament before taking effect… It also gives South Africans certainty that changes affecting their pockets will not happen without the necessary checks and balances in place.”
The DA believes their court action pressured the Finance Minister and Treasury to retreat and approach the situation legally. In a public statement, the party said it was proud to stand up for South Africans who would have been heavily impacted by a higher cost of living if the VAT hike went ahead.
John Steenhuisen, DA leader, had earlier said that trying to rush through the VAT increase without full parliamentary approval was a direct threat to South Africa’s democracy.
He also warned that without clear rules and cooperation between parties in the Government of National Unity (GNU), the country could face further political instability.
The VAT issue had already caused major cracks between the ANC and the DA inside the GNU. Tensions escalated after the ANC passed the national budget framework without DA support, relying instead on smaller coalition partners.
For now, the VAT increase will not go ahead. However, the legal case about whether a finance minister can ever unilaterally raise taxes is still alive — meaning South Africa could see more court battles about tax laws in the future.
