The Democratic Alliance says a 0.5% VAT increase will have a devastating impact on the country’s people
A major member of South Africa’s ruling coalition has filed a lawsuit against the government, aiming to block a tax hike that it claims will have a “devastating effect” on the population.
The move by the Democratic Alliance (DA) – the second largest party in South Africa’s Government of National Unity (GNU) – came a day after the South African National Assembly narrowly passed fiscal framework and revenue proposals. The measures include raising Value Added Tax (VAT) by 1 percentage point, spread over two years. Some 194 lawmakers voted in favor of the budget on Wednesday, while 182 others were against it.
The DA, which had repeatedly opposed the plan, voted against the legislation, claiming that a parliamentary committee’s adoption of a report supporting the fiscal framework was procedurally flawed.
President Cyril Ramaphosa’s African National Congress (ANC), the largest party in the GNU, secured support from smaller partners, including non-members of the ruling coalition.
In a statement on Thursday, Helen Zille, the DA’s federal council chairperson, said the 0.5% VAT hike “will have a devastating effect on South Africans already struggling to make ends meet.”
“A VAT increase is set to come into effect on 1 May unless it is interdicted, and that is what the Democratic Alliance is doing. We are taking this fight to court to ensure that South Africans are not unfairly burdened with higher costs of living,” she stated.
The multi-party GNU, led by President Ramaphosa, was formed in 2024 after the ANC lost its 30-year parliamentary majority in the May 29 elections. Ramaphosa won a second term in mid-June after the ANC forged a coalition deal with smaller parties and the DA, which is primarily supported by white South Africans in the southwestern region, particularly in and around Cape Town.
The disagreements between the ANC and the DA over the 2025 budget have sparked widespread concerns that the GNU could collapse. President Ramaphosa’s spokesperson, Vincent Magwenya, has reportedly criticized the pro-business party for opposing the financial reforms.
“You cannot be part of a government whose budget you opposed. We expect the DA to obviously reflect their participation, or rather continued participation, in the GNU, having voted against the budget,” local outlet IOL cited Magwenya as saying.
According to Reuters, the DA is expected to decide whether to continue participating in government in the coming days.
