PoliticsPREMIUM

POLITICAL WEEK AHEAD: Parliament to adjust budget plans after VAT order

High court handed down an order on Sunday to suspend the contentious VAT increase

In the short term, consumers may benefit from the VAT reversal — but the longer-term consequences of uncertain policymaking may outweigh those gains, says the writer.Picture: 123RF
In the short term, consumers may benefit from the VAT reversal — but the longer-term consequences of uncertain policymaking may outweigh those gains, says the writer.Picture: 123RF

Parliament is set to assess how its legislative schedule will be affected by the Western Cape High Court’s decision to set aside the fiscal framework.

This week, several committee meetings are expected to review their annual performance plans and budget vote presentations from various government departments. These plans, typically influenced by budget allocations, may be disrupted after the cancellation of the VAT hike and the withdrawal of the Division of Revenue Bill and Appropriation Bill by finance minister Enoch Godongwana last week.

“Other business of parliament will continue,” parliament’s spokesperson, Moloto Mothapo, told Business Day. 

“The full extent of the impact on the programme will be determined and where revision of [a] programme is necessary the programme committees will do so.” 

The court handed down a court order to suspend the VAT increase, which was due to take effect on May 1.

“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,” Mothapo said. 

“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%.” 

President Cyril Ramaphosa is expected to give the keynote address at Cosatu’s International Workers’ Day celebrations in Mpumalanga on May 1. The union federation’s president, Zingiswa Losi, is also expected to give a speech.

Brics holds its foreign ministers’ meetings on April 28-29 in Rio de Janeiro, Brazil, which SA is expected to attend.

Brazil’s Brics sherpa, Mauricio Carvalho Lyrio, said the meetings would address the bloc’s role in dealing with regional and geopolitical crises, with a focus on promoting peace. Other items include the reform of global governance and the strengthening of international regimes in various areas, including those linked to sustainable development and the expansion of dialogue with partner countries. 

Four candidates from four political parties will contest by-elections on April 30 in Mandeni, KwaZulu-Natal. The previous ANC councillor, Phendukani Mabhida, was shot dead in KwaSithebe in February. ANC, EFF, IFP and MK Party candidates are to contest the ward. 

maekot@businesslive.co.za

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