Finance Minister Enoch Godongwana has introduced urgent legislation in Parliament to scrap the impending value-added tax (VAT) increase, set to take effect in just six days. However, the move has sparked legal uncertainty over whether it will be sufficient to halt the hike in time.
In an unprecedented step, Godongwana has also withdrawn the two key money bills that form the foundation of the national budget — effectively leaving South Africa without an approved budget nearly two months into the new financial year.
The latest Parliamentary notice confirms that the new Rates and Monetary Amounts and Amendment of Revenue Laws Bill has been submitted following its publication in the Government Gazette on Thursday. The bill, which outlines tax rates including VAT, income tax, transfer duties, and carbon tax, has been referred to the finance committees of both the National Assembly and the National Council of Provinces — but only for information at this stage.
According to parliamentary rules, the bill cannot be formally classified or processed until seven working days after its introduction — a timeline that exceeds the 1 May implementation date for the 0.5 percentage point VAT hike.
If not stopped by a separate legal mechanism, the increase could still come into effect before Parliament is able to consider or pass the new bill. This has raised concerns about the need for urgent court intervention, particularly with the National Assembly due to recess next week.
The Democratic Alliance (DA), which is challenging the VAT hike in court, confirmed that Godongwana’s legal team has approached it for an out-of-court settlement. A court ruling is expected on Tuesday if a deal is not reached beforehand.
