The Southern African Institute of Government Auditors (Saiga) has described the recent high court ruling that only parliament, not the minister of finance, can change the VAT rate as a key moment in the country’s public finance.
The VAT judgment has created a shift in the National Treasury’s revenue-collection legal powers, which until the VAT challenge were left unbothered for decades.
Finance minister Enoch Godongwana was taken to court by the DA, which challenged the VAT Act, arguing it gave the finance minister the power to change the VAT rate for a year without parliament’s approval.
A full bench of the Western Cape High Court this month found the section that empowers the minister to alter the VAT rate constitutes an impermissible delegation of legislative power to the executive.
“The court’s decision to reduce the finance minister’s VAT powers marks a key moment in South Africa’s public finance landscape,” the auditors’ group said in a statement.
“For public sector auditors and accountants, this creates an opportunity to reinforce governance, strengthen assurance processes, and support parliament’s oversight role through high-quality audit reporting and transparent financial management.”
The institution said the judgment reasserts parliament’s constitutional role, limits executive discretion and restores clarity about how and when taxes may lawfully be imposed.
“For auditors and accountants in the public sector, the ruling is more than a legal technicality.
“It reshapes audit focus areas, elevates the importance of legislative compliance, and reinforces the profession’s responsibility to uphold the rule of law in public finance.”
The order affirming that only parliament has the authority to impose VAT tax hikes still needs confirmation by the Constitutional Court.
University of Johannesburg macroeconomic and fiscal analyst Prof Dumisani Jantjies said stripping the National Treasury of the power to amend the VAT rate leaves other indirect taxes adjusted through executive notices under the Customs and Excise Act open to legal challenges.
This includes fuel levies and alcohol and tobacco taxes.
“The VAT judgment makes other taxes very vulnerable. The effect is that parliament is the only one that approves taxes. If that judgment stays, taxes like your fuel levy will be vulnerable to legal challenges similar to that of VAT,” he said.
The EFF has seized on the judgment to bolster its challenge to the minister’s power to implement fuel and carbon levies without parliamentary approval through money bills.
The EFF’s case will be heard in the Western Cape High Court on May 20.
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