South Africa’s pro-business Democratic Alliance (DA) has taken legal action against the government, challenging the legality of the budget process and seeking to block the planned value-added tax (VAT) increase. The lawsuit, filed on Thursday, deepens divisions within the fragile ruling coalition.
The National Assembly narrowly passed the budget’s fiscal framework and revenue proposals on Wednesday. The African National Congress (ANC), the largest party in the coalition government, secured enough votes with support from smaller parties and opposition groups outside the coalition.
However, the DA, which is the second-largest party in the coalition, strongly opposed the legislation. The party argues that the adoption of a parliamentary committee report supporting the fiscal framework was procedurally flawed. Additionally, the DA has raised concerns about the proposed 1% VAT increase, which will be implemented over two years. The party believes the increase will disproportionately affect low-income South Africans, worsening their economic burden.
The legal challenge has sparked fears that the DA may withdraw from the multi-party coalition government, which was formed last year after the ANC lost its parliamentary majority for the first time since the end of apartheid in 1994. A decision on the DA’s continued participation in government is expected in the coming days.
Helen Zille, the DA’s federal council chairperson, confirmed that the party is seeking an interdict to prevent South Africa’s tax authorities from implementing the first phase of the VAT increase—a 0.5% hike scheduled to take effect on May 1.
“This interdict request is based on our legal challenge to suspend the finance minister’s announcement of the VAT hike and overturning Parliament’s adoption of the Fiscal Framework,” Zille stated.
The case is expected to set a precedent for how fiscal policies are contested in South Africa’s courts, adding further uncertainty to the country’s economic and political landscape.
