The DA launched an urgent application in the Western Cape High Court to interdict the VAT increase from being implemented on May 1 and to set aside the adoption of the Fiscal Framework and Revenue Proposals.
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The DA has confirmed that it will continue with its court action against the ANC over the proposed Value-Added Tax (VAT) increase, despite both parties saying that they held constructive discussions at the weekend and that the Government of National Unity (GNU) was stable.
According to DA Federal Chairperson Helen Zille, the party has not decided to drop the court case.
"We have not decided to drop the court action on the VAT case," Zille said.
The DA's court action centers around the party's opposition to the 0.5 percentage point VAT hike, which they believe will have a negative impact on the economy.
Two weeks ago, the party filed an urgent court application at the Western Cape High Court, challenging the adoption of the 2025 Fiscal Framework and Revenue Proposals, which include the VAT hike.
The party claims that the decisions taken by the National Assembly and National Council of Provinces (NCOP) were "fundamentally flawed" and "unlawful."
"The VAT hike is a regressive tax that will hurt the poor and vulnerable the most," the DA wrote in its court papers.
The DA's court application challenges the legality of the fiscal framework adoption process, citing several irregularities.
These include the failure of the Standing Committee on Finance and Select Committee on Finance to vote on the final report's wording and the inclusion of a non-binding recommendation to reconsider the VAT hike.
"The reports adopted by the National Assembly and NCOP are unlawful and invalid," the court papers added.
While the DA voted against the Budget, specifically the VAT hike, the ANC was help to get it passed thanks to other parties in and outside of the GNU.
"We urge the court to set aside these decisions and remit the matter back to the committees for reconsideration," the DA said in copurt papers.
The DA also takes issue with the Minister of Finance's (Enoch Gondongwana) power to change the VAT rate without parliamentary approval, as per section 7(4) of the VAT Act.
Meanwhile, the ANC is pushing for a new formal agreement that would legally bind parties in the GNU to support future parliamentary motions.
ANC Secretary-General Fikile Mbalula, last week, emphasised the need for a rules-based approach, saying that his party was advocating for a approach in terms of the functioning of the GNU going forward.
The party has been in a series of meetings with political parties to resolve the current budget impasse.
Mbalula said that the GNU was not just about the ANC and DA, but about all parties working together to prioritise the challenges facing South Africa.
Despite the ANC's efforts to push for a new agreement, tensions within the GNU remain.
The DA has vehemently rejected the suggestion of a new document, citing the existing Statement of Intent that was established during GNU negotiations last year.
"We have a Statement of Intent, negotiated last year, and that is a signed and sealed document that forms the basis of the GNU," Zille said.
The Freedom Front Plus (FF Plus) has also reportedly expressed its concerns, stating that it will continuously assess its participation in the GNU.
Its spokesperson Wouter Wessels said the party would only participate in the GNU as long as they could play a positive part while it benefited their electorate, constituents and the country as a whole.
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