Media Statements

The African National Congress (ANC) notes the decision of the Western Cape Division of the High Court to issue an order setting aside Parliament’s adoption of the Fiscal Framework tabled by Minister of Finance, Cde Enoch Godongwana, last month. The court order, agreed to unanimously by all parties in court, in essence serves to provide legal certainty affirming the decision already taken by the Minister of Finance to reverse the proposed Value Added Tax (VAT) increase of 0.5% which had been scheduled to come into effect on the 1st May 2025.

Minister Godongwana announced his decision to reverse the VAT hike and introduce the Rates and Monetary Accounts and the Amendment of the Revenue Laws Bill (Rates Bill) on the 24th April 2025.

The Fiscal Framework and Revenue Proposal, which is part of the three budget instruments, is the foundational document for the National Budget and sets out a blueprint for how government will raise and spend money for the period under consideration. As part of the adoption of the Budget, legislation dictates that once the Fiscal Framework has been adopted Parliament must thereafter pass sequentially and within the stipulated timelines, the Division of Revenue Bill and the Appropriations Bill.

Today’s court order therefore has the effect of setting aside the adoption of the Fiscal Framework, as adopted by the two Houses of Parliament, as a result of the Minister’s decision to reverse the increase in VAT thereby amending the Fiscal Framework. The court has made no decision on the merits of the application that had been brought before it by the applicants. Parliament is now expected to pronounce on the way forward on the processing of the envisaged changes to the revenue proposals and the expenditure adjustments.

END//