The Constitutional Court has reserved judgment in a case that will determine whether South Africa’s finance minister may change the value-added tax rate before Parliament approves the adjustment.
The dispute centres on section 7(4) of the Value-Added Tax Act. The provision has allowed the minister to announce an altered rate that takes effect before the legislative process is completed.
The Western Cape High Court found the provision unconstitutional and gave Parliament 24 months to correct it. National Treasury and the South African Revenue Service have asked the Constitutional Court to overturn that ruling, while the Democratic Alliance and Economic Freedom Fighters want the order confirmed.
No judgment date has been announced. The reserved decision does not itself change the current VAT rate.
The DA’s argument is that the power to impose taxes belongs to the legislature and cannot be delegated to a member of the executive. Its counsel told the court that taxation directly determines how much money the state takes from households and businesses and should therefore remain subject to parliamentary approval.
Treasury and SARS argue that government needs a mechanism to respond quickly to revenue shortfalls and fiscal pressure. Their position is that waiting for a money bill to complete the full parliamentary process could leave the state unable to meet spending commitments or force it to borrow under pressure.
The case follows the public and legal battle over the government’s abandoned proposal to raise VAT in 2025. A Treasury statement at the time confirmed that Finance Minister Enoch Godongwana agreed to a court order suspending the proposed half-percentage-point increase after announcing its withdrawal.
Eyewitness News reported the Constitutional Court arguments when the matter was heard on Thursday. Business Day and eNCA subsequently confirmed that judgment was reserved and set out the competing positions of Treasury, SARS, the DA and the EFF.
The Constitutional Court must decide whether to confirm the High Court’s declaration of invalidity, overturn it or issue a different order dealing with the minister’s powers and Parliament’s role.
If the declaration is confirmed, Parliament will have to address the constitutional defect within the period set by the court, unless the apex court changes that timetable. The final order will also determine how any future VAT adjustment must be processed.
For consumers and businesses, the immediate point is simpler: the case concerns who has the legal authority to change the rate and what procedure must be followed. It is not an announcement of a new VAT increase.
