By Staff Reporter
Finance Minister’s Enoch Godongwana’s decision to suspend value-added tax in a lawful matter shows that government decisions cannot be made without proper oversight, according to the Democratic Alliance.
“It also gives South Africans certainty that changes affecting their pockets will not happen without the necessary checks and balances in place,” said DA Federal Council chairperson Helen Zille.
“The impending VAT hike has now been formally stopped by an order of court agreed between the Minister of Finance and the DA. This also includes a settlement with the Speaker.”
The Western Cape High Court ruled on Sunday that the hike must officially be suspended.
She said the decision ensured that any changes to the VAT rate must be properly approved by Parliament before taking effect, and it set aside the unlawful support lent to this VAT hike by a number of parties.
Meanwhile, the African National Congress has said it noted the court’s decision to issue an order setting aside Parliament’s adoption of the Fiscal Framework tabled by Godongwana last month.
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 24 April.
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 party said.
The order enables Godongwana to table the budget instruments afresh.
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