Africa-Press – South-Africa. Minister of Finance Enoch Godongwana has defended the value-added tax (VAT) increase and said his announcement has “legal effect”.
In responding papers in the Western Cape High Court, Godongwana said the view that his VAT rate announcement is unlawful because of an alleged unlawful adoption of the fiscal framework, “has no legal basis”.
He was responding to the Democratic Alliance (DA) and Economic Freedom Fighters (EFF) applications to have the finance committee report adoption declared invalid and to interdict the implementation of the 0.5 percentage point VAT increase on 1 May.
Godongwana said it’s a little too late to change the VAT increase and has dismissed the argument that his VAT announcement during his budget speech was unlawful.
Godongwana has also told the court in his answering affidavit that his decision to introduce the VAT rate change “cannot be interdicted at this stage”.
He said that relief sought by both the EFF and DA would be “moot” because the decision to introduce the VAT rate increase has been made and adopted by both houses of Parliament.
On the DA’s challenge of Section 7(4) of Value Added Tax Act of 1991, Godongwana said this is “misdirected”.
“It advances two bases for the contention that the section is unconstitutional. Both are bad in law”, said Godongwana.
The Western Cape High Court is expected to hear the DA’s submission on Tuesday, where the party will argue its case before an expected full bench.
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