In a heated legal battle, Advocate Tembeka Ngcukaitobi, representing the Economic Freedom Fighters (EFF), has accused Finance Minister Enoch Godongwana of deception and dishonesty regarding the 0.5 percentage point VAT hike proposed in the 2025 national budget. Ngcukaitobi’s accusations were laid out in the Western Cape High Court, where the EFF has launched a formal challenge to the VAT increase announced by Godongwana on March 12, 2025.
The Accusations: Deception and Lack of Transparency
During the court proceedings, Ngcukaitobi argued that Godongwana misled the public by suggesting that the VAT increase could be reversed, despite the fact that the process to implement the hike was already well underway. Ngcukaitobi contended that the government’s handling of the VAT hike lacked transparency, making the process irrational and unreasonable. According to Ngcukaitobi, Godongwana’s statements gave the impression that the decision could be easily undone, but in reality, it was already too far along in the legislative process for any meaningful change to occur.
A Coalition Challenge: EFF and DA Take on the VAT Hike
The EFF, joined by the Democratic Alliance (DA), is fiercely opposing the VAT increase, arguing that it unfairly burdens the poor and was not sufficiently discussed within the Government of National Unity (GNU). The opposition parties claim that the VAT hike, which is part of the government’s broader fiscal strategy, will disproportionately affect low-income households and vulnerable citizens, who are already struggling with the cost of living.
Both the EFF and DA argue that the government failed to engage in proper consultation on such a significant tax change, claiming that the consultation process was flawed and that the voices of the marginalized were not heard in the decision-making process.
The Impact of the VAT Hike on South Africa’s Poor
The 0.5 percentage point VAT hike is seen as a necessary step to address South Africa’s growing fiscal deficit, but critics argue that it will exacerbate economic inequality and place a heavier financial burden on the poorest sectors of society. The EFF and DA have voiced concerns that the VAT increase, while aiming to boost government revenue, could lead to higher prices for basic goods and services, further tightening the financial strain on low-income families.
As the legal challenge to the VAT hike continues, South Africans are watching closely to see if the courts will rule in favor of the opposition parties or uphold the government’s tax policy. The outcome of this case could have significant implications for both future fiscal policies and the government’s approach to public consultation in its decision-making processes.
Key Takeaways:
- Advocate Tembeka Ngcukaitobi has accused Finance Minister Enoch Godongwana of deception in promoting the 0.5% VAT hike in the 2025 national budget.
- The EFF and Democratic Alliance (DA) have challenged the VAT increase, arguing it burdens the poor and lacked sufficient consultation.
- The court case highlights concerns about the transparency and legitimacy of the government’s tax policies, with the opposition calling for fairer processes.
As the court proceedings move forward, this case is set to become a defining moment in South Africa’s fiscal policy and could shape the country’s approach to taxation and public engagement for years to come.
