COSATU warns legally challenging country’s VAT laws could disrupt entire system

CAPE TOWN - The Congress of South African Trade Unions (COSATU) has warned that legally challenging the country’s value-added tax (VAT) laws could disrupt the entire system.

Minister Enoch Godongwana is facing a court challenge where the Democratic Alliance (DA) and Economic Freedom Fighters (EFF) want the Western Cape High Court to set aside his VAT increase announcement on 12 March, and interdict the implementation of the decision.

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The DA has taken it a step further, calling on the court to declare a section of the VAT Act unconstitutional in Part b of its application.

COSATU's parliamentary coordinator, Matthew Parks, has warned against this.

"The legal case about the law is not helpful because that will risk the stability of the entire system."

But he says Godongwana is not doing enough to find alternatives to the 0.5 percentage point VAT increase - which is due to come into effect on 1 May.

"Because Parliament was quite clear both in the finance committees and the house to find alternatives to the VAT and personal income tax hikes."

Godongwana has defended the VAT increase in court.