VAT Act: MK Party says days of ANC taking unilateral decisions are a thing of the past

The uMkhonto weSizwe (MK) Party said the shifting political landscape is prohibiting the African National Congress (ANC) from using the unfettered power it had in the past to take unilateral decisions like hiking the value-added tax (VAT) rate.

This week, the Western Cape High Court ruled a section of the VAT Act unconstitutional and invalid, saying it gives the finance minister too much power to decide on altering taxes when this should be Parliament’s prerogative.

The main opposition party in Parliament said it stands by its belief that VAT is a regressive tax, which is anti-poor and will further impoverish struggling South Africans.

The Democratic Alliance took Finance Minister Enoch Godongwana to court last year after an attempt to raise the VAT rate by 0.5 percentage points in his first iteration of the 2025 budget.

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The Economic Freedom Fighters (EFF) joined the case rather than launching a separate application.

But the MK Party is patting itself on the back for breaking the ANC's monopoly on power and strengthening parliamentary accountability.

In its judgment, the court said Parliament must amend the VAT Act to take control over the raising of taxes, and it can’t delegate this power to the executive and bypass the money bill procedure.

The MK Party said that, through its presence on the political landscape, the ANC no longer enjoys unchecked power after raising the VAT rate from 14% to 15% in 2018 without being challenged.

“The MK Party is ensuring that decisions affecting the people of this country can no longer be taken unilaterally by a tired and failing governing establishment,” the party said in a statement.

The court’s ruling on unconstitutionality and invalidity will still have to be confirmed by the Constitutional Court.

Parliament has been given two years to remedy the VAT Act.