High Court Rules Minister Cannot Set VAT Rate Without Parliamentary Approval

• The High Court in Cape Town declared section 7(4) of the Value-Added Tax Act unconstitutional, as it allows the Minister of Finance to set VAT rates before Parliament passes confirming legislation.
• The court ruled this provision is an impermissible delegation of Parliament’s taxing power to the executive.
• The declaration of invalidity is suspended for 24 months to allow Parliament to fix the issue, and the order is referred to the Constitutional Court for confirmation.
• The case arose after the 2025 Budget, where a proposed VAT increase was announced and later withdrawn, but the Democratic Alliance still challenged the constitutionality of section 7(4).
• The court emphasized that the power to tax must be exercised by Parliament, not delegated to the executive.

Source: grok.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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