By Alessandro Parodi and Sfundo Parakozov
South Africa’s high court on Tuesday dismissed a case brought by the Economic Freedom Fighters (EFF) party aimed at blocking a fuel tax increase proposed in last month’s budget, a party spokesperson told Reuters.
The far-left opposition party had argued that the measure would disproportionately affect the country’s poor and that Finance Minister Enoch Godongwana did not follow proper parliamentary process in introducing it.
The 4% increase in the levy South Africans pay on petrol and diesel will now kick in on Wednesday.
In court papers Godongwana said he had the right to raise the fuel levy and that the EFF’s case appeared aimed at blocking passage of the budget, which he has already revised twice due to disagreements in the coalition government.
Godongwana said that if the court had blocked the tax increase, it would have led to a revenue shortfall of at least 3.5 billion rand ($196 million).
He has already had to backtrack on a contentious plan to raise value-added tax, under pressure from the second-biggest political party within the coalition, the Democratic Alliance, and others outside it.
Investors want to see evidence that Africa’s biggest economy can rein in spending and hit revenue targets after a steep rise in public debt over the past two decades.
Separately, the government said on Tuesday that the country’s regulated petrol and diesel prices would fall in June, as lower global crude oil prices and a stronger rand outweighed the higher levy.
REUTERS
