South Africa’s opposition Democratic Alliance (DA) party has filed a legal challenge against the country’s budget process, seeking to block a proposed increase in value-added tax (VAT).
The DA’s court case, filed Thursday April 3, contends that the parliamentary Committee’s approval of the budget’s fiscal framework and revenue proposals was procedurally flawed. The party also strongly opposed the planned VAT hike, arguing that the increase would disproportionately impact the country’s poorest citizens, already struggling with high costs of living.
The challenge comes after a narrow victory in the National Assembly on Wednesday, where the African National Congress (ANC), the largest party in the ruling coalition, managed to pass the fiscal framework with support from smaller coalition partners and external parties. However, the DA, as the second-largest party in the coalition, voted against the budget, highlighting the growing divide within the fragile alliance formed last year following the ANC’s loss of its parliamentary majority.
The DA is now seeking an interdict to prevent South Africa’s tax authority from implementing the 0.5% VAT increase scheduled for May 1. This move has sparked concerns that the DA might consider withdrawing from the multi-party coalition, deepening the political instability as South Africa grapples with economic challenges and growing market anxieties. The DA is expected to make a decision soon regarding its future participation in the government, with major implications for the stability of the ruling coalition.