DA claims victory in getting Treasury to drop its intended VAT increase

CAPE TOWN - The Democratic Alliance (DA) has claimed victory in getting the National Treasury to drop its intended 0.5 percentage point value-added tax (VAT) increase.

The party has also slammed Finance Minister Enoch Godongwana, with its federal council chairperson, Helen Zille, saying he should be "embarrassed" for buckling under pressure after fighting for the increase even in court.

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Zille said the African National Congress (ANC) also deliberately deceived smaller parties when it said they would consider other alternatives, even when the VAT increase was already confirmed.

The DA wasted no time in briefing the media on Thursday morning after receiving an out-of-court settlement from National Treasury late on Wednesday night.

The party said the VAT change was purely based on their court application in the Western Cape High Court to have the increase interdicted and not discussions between smaller parties and the ANC.

"Why did that take me by surprise? Because less than one week before that, in his answering affidavit in our court case, the minister of finance made it absolutely clear that the VAT increase would go ahead on the 1st of May."

Zille also had some words for Godongwana.

"That, in itself, is a massive embarrassment for the finance minister and certainly in a normal democracy, a finance minister wouldn’t survive that."

She said that the fight was still far from over as Parliament's finance committees would have to start the process over with a revised budget excluding any VAT increase.