The Western Cape High Court has declared section 7(4) of the Value-Added Tax Act unconstitutional, affirming that only Parliament can change the VAT rate and that the Minister of Finance cannot do so unilaterally.

The ruling, delivered today (6 March), brings to a close a constitutional challenge brought by the Democratic Alliance following last year’s contentious budget process, during which the Minister of Finance announced a proposed VAT increase that was ultimately withdrawn after fierce opposition.

The court found that allowing the Minister of Finance to alter the VAT rate through a budget announcement amounts to an impermissible delegation of legislative authority. The judgment confirmed that taxation powers must remain with Parliament as the elected representatives of the people.

“This ruling vindicates our constitutional challenge and reinforces that there can be no taxation without proper parliamentary oversight,” said Helen Zille, chairperson of the DA Federal Council.

The controversy dates back to the 2025 budget speech, when the Minister of Finance indicated that VAT would be increased. The announcement led to a lengthy delay in the budget’s acceptance, with opposition parties voting fervently against the proposal. Eventually, the minister backed down on the VAT increase.

The court’s judgment identified that section 7(4) lacked clear limits governing how the VAT rate could be altered, which undermines the constitutional balance between executive acts and parliamentary supremacy.

The declaration of invalidity has been suspended for 24 months to allow Parliament time to correct the defect in the law. During this period, the current legislative framework remains in force.

The DA argued the case on the principle of “no taxation without representation”, maintaining that Parliament, as the representation of voters, must be the decision-maker on taxation matters.

“The DA brought this case to defend the constitutional role of Parliament and to ensure that decisions affecting the tax burden on millions of South Africans are taken transparently and democratically,” Zille said.

The judgment means that any future changes to VAT must occur through proper legislative processes rather than executive decree.

The ruling strengthens accountability in fiscal governance and establishes a clear precedent that the executive cannot hold unchecked authority to adjust national taxes without parliamentary approval.

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