CAPE TOWN - The Western Cape High Court has declared parts of the Value-Added Tax (VAT) Act unconstitutional and invalid.
The ruling confirms that only Parliament, and not government, holds the right to change tax rates.
It found that allowing the Finance Minister to alter the rate before MPs approve the budget is unconstitutional.
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The Democratic Alliance brought the application and is welcoming the judgment.
It came after a VAT increase last year delayed the delivery of the budget.
Parliament now has 12 months to amend the legislation.
Welcoming the ruling, the DA said: “This ruling vindicates our constitutional challenge and reinforces that there can be no taxation without proper parliamentary oversight. It is a case of ‘No taxation without representation’ – Parliament is the representation of voters and must be the decision-maker on taxation.”
Economic Freedom Fighters said the court’s decision vindicated its argument that there should never be taxation without representation.
“The ability to increase the taxes on citizens should be determined by their democratically elected public representatives and should not be determined by an individual who operates on the misguided economic advice of a neo-liberal National Treasury,” the party said.