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The Democratic Alliance (DA) welcomes Treasury’s announcement that it intends to withdraw the planned VAT hike. This is a major victory for the DA and, more importantly, for millions of South Africans. This outcome follows sustained opposition by the DA in Cabinet, Parliament, and, most decisively, the courts.

From the outset, the DA has opposed this tax increase, highlighting its impact on already struggling South African households.

Our urgent court application filed in the Western Cape High Court exposed not only the unconstitutional and procedurally flawed nature of the VAT hike, but also the arbitrary power the Minister of Finance sought to wield in imposing it.

The approach by lawyers acting on behalf of the Minister of Finance with a proposal for an out-of-court settlement to scrap VAT marks a critical turning point in this battle. It is now clear that Treasury had no choice but to reverse its decision in the face of our relentless and strategic legal pressure.

Ironically, the Minister’s backtracking underscores the very point made in our court application: that he had attempted to exercise unconstitutional powers to impose or withdraw VAT unilaterally.

The DA is currently awaiting a formal written settlement offer before responding to the Minister’s request, and we will keep the public informed of developments.

While this represents a significant step toward stopping the VAT hike, the process is not yet complete. A final court order and a pronouncement on the validity of the fiscal framework by the Speaker must still follow.

Treasury’s retreat is not a reconsideration. It is a retreat born of necessity in the face of likely legal defeat.

Even Finance Minister Enoch Godongwana’s own court papers confirmed the intention to proceed with the VAT hike, and it was only the real prospect of losing in court, thanks to the DA’s exceptional legal team, that forced Treasury into retreat.

Our legal action achieved its intended result. When Parliament failed to act, the DA stood firm to protect the public from the consequences of a tone-deaf and anti-poor budget.

At every turn - from the Cabinet table to the courtroom - we held the line. This underscores the power of the DA to effect change in a new context where there is no longer a majority party.

While others folded, we fought. And we won.

Issued by Helen Zille - DA Federal Council Chairperson