Rabia Mayet | rabiamayet@radioislam.co.za
29 April 2025
2-minute read
The handing down of a court order at the Western Cape High Court to suspend the 0.5% VAT increase that was meant to come in effect from May 1st was announced the previous day.
According to Professor Des Kruger, tax consultant at Webber Wentzel, there is nothing “illegal” or “unconstitutional” about the Finance Minister’s decision that had utilized an act present in the Income Tax Act since 1991, because “parliament empowered the minister to make announcements.” To determine the constitutionality of the minister’s conundrum, he says that ministers’ ought to be given the powers to carry out certain acts “expeditiously,” and discussions around the budget should not be left open for “weeks on end.”
The determination was not made by the court; instead, the parties came to a settlement agreement which they made an order of the court, with consensus to draw more on the fiscal framework. Prof Kruger says that it is imperative to “determine economic policy within this framework.”
However, there are others who feel that consultation should take place before the decision, and Prof Kruger indicated that there should be certain limitations within the framework because “people need certainty around taxation.”
Regarding SARS, Professor Kruger mentioned that SARS continues to work for the country; “they do the best that they can,” have a “high level of expertise,” and that the “ship is going in the right direction.”
While companies and businesses are legally obliged to pass the increase on from the supplier, now that the VAT increase is in the rearview mirror, those announcements will have to be scrapped.
Listen to the full interview on Sabahul Muslim.
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