VAT hike officially suspended in South Africa

The Western Cape High Court officially suspended the VAT increase in South Africa, with only a few days to spare. 

The Court announced that the VAT increase of half a percentage point on 1 May 2025 and the second half-a-percentage-point increase in April 2026 are suspended.

It ruled that the increase in VAT is suspended pending the passing of legislation regulating the VAT rate.

It also set aside the resolutions of the National Assembly and the National Council of Provinces to accept the Standing Committee on Finance’s 2025 Fiscal Framework report.

The DA brought the case against parliament, as despite being a member of the GNU, it voted against the increase throughout parliament’s processes.

The increase in VAT was announced in the 2025/25 National Budget on the second attempt in March.

Following widespread public and political resistance from GNU members, Finance Minister Enoch Godongwana announced earlier this week that the VAT hike would be rescinded and remain at 15%.

Despite the Minister tabling a Bill retaining VAT at 15%, it was doubtful that it would be approved by Parliament and promulgated before 1 May 2025, as it is only two working days away.

However, the decision by the Western Cape’s High Court means that the VAT hike will no longer take place.

As reported by News24, the Court also ordered the Finance Minister and parliamentary leaders to pay costs, noting mistakes in adopting the fiscal framework. 

“We are pleased that the Minister of Finance eventually came back to the table and agreed to suspend the VAT increase in a lawful manner,” said the DA.

“This shows that government decisions cannot be made without proper oversight. It also gives South Africans certainty that changes affecting their pockets will not happen without the necessary checks and balances in place.”