Court orders Vat hike suspended

The Western Cape High Court has ordered the Vat hike suspended - until Parliament passes legislation making Finance Minister Enoch Godongwana’s decision to reverse the VAT hike an act of Parliament.

The order was made by agreement and came on Sunday afternoon after all the parties to the court case had a meeting with the judges in the case.

The court order also set aside the resolutions in Parliament that led to its adoption of the fiscal framework - national treasury’s budget outline.

The court’s order made it clear that the legal battle over the constitutionality of the VAT Act - which allows the minister to determine a date for a VAT increase to come into operation before it has been approved by parliament - may still be fought at a later date.

Godongwana announced that the VAT hike would be reversed on Wednesday but it was uncertain whether this was possible in law, with the DA arguing in court papers on Friday that only Parliament had this power.

But it would be impossible for Parliament to act before May 1, said the DA. Only a court order could stop the VAT increase from coming into effect.