For soundbite of Parliament Spokesperson, Moloto Mothapo, https://we.tl/t-qXa1MkgUrk
Parliament, Sunday, 27 April 2025 – The Presiding Officers of Parliament welcome the agreement reached among parties in the court proceedings concerning the Value-Added Tax (VAT) increase and the adoption of the 2025 Fiscal Framework and Revenue Proposals. The settlement, which has been made an order of the Cape High Court, brings resolution to a complex matter of significant national importance.
In terms of the agreement made an order of court, the Minister of Finance’s announcement on 12 March 2025, made under section 7(4) of the Value-Added Tax Act 89 of 1991, adjusting the VAT rate to take effect in two phases (0.5 percentage points from 1 May 2025 and a further 0.5 percentage points from 1 April 2026), is suspended pending the passing of legislation regulating the VAT rate or the final determination of the court proceedings. In addition, the resolutions of the National Assembly and the National Council of Provinces adopted on 2 April 2025 to approve the 2025 Fiscal Framework are set aside. This outcome enables the Minister of Finance to table revised budget instruments afresh.
Parliament affirms that in entering into the settlement, it had not conceded that the parliamentary processes followed in adopting the Fiscal Framework were unlawful or procedurally defective. The decision to reach consensus was motivated by the recognition that new developments had overtaken the original framework. The Minister earlier withdrew the Division of Revenue Bill [B7–2025] and the Appropriation Bill [B6–2025], and introduced the Rates and Monetary Amounts and Amendment of Revenue Laws Bill [B14–2025], which maintains the VAT rate at 15%.
This moment of consensus demonstrates the strength of South Africa’s constitutional democracy and the ability of its institutions to resolve complex matters through dialogue, cooperation, and respect for due process.
The Presiding Officers thank all parties involved for demonstrating leadership, maturity, and a shared commitment to the wellbeing of the nation.
ISSUED BY THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA
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