Godongwana moves swiftly to introduce new bill to cancel VAT hike
But it's posing a legal conundrum as to whether it’s enough to nullify the increase in such a short space of time, considering the parliamentary processes that need to be followed.
FILE: Finance Minister Enoch Godongwana. Picture: GCIS
CAPE TOWN - Finance Minister Enoch Godongwana has moved swiftly to introduce a new bill in Parliament to cancel the value-added tax (VAT) hike, which is due to come into effect in just six days time.
But it's posing a legal conundrum as to whether it’s enough to nullify the increase in such a short space of time, considering the parliamentary processes that need to be followed.
For the first time in the country’s history, the finance minister has also withdrawn the two main money bills that make up the national budget, effectively leaving the country without a budget almost two months since the start of the new financial year.
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Parliament's latest notice of announcements and tablings indicates that the finance minister has now submitted the rates and monetary amounts and amendment of revenue laws bill following his announcement in the government gazette on Thursday.
Parliament notes that it has referred the bill to the finance committees of both houses for information.
However, the notice indicates the bill can only be classified in terms of how it needs to be handled, seven parliamentary working days after its introduction.
This time frame would exceed the day on which the 0.5 percentage point increase is due to take effect and it would only be the first step in Parliament considering the new bill.
The new amendment bill, which also sets out the rates of normal tax, transfer duties, excise duties and carbon tax, seeks to pre-empt the increase announced by the minister on 12 March when he tabled the annual budget.
Had the minister not retracted the previous bill, Parliament would have had 12 months to consider retroactively whether or not to approve a VAT hike.
With the National Assembly scheduled to go on leave next week, it's unclear whether a court order will still be required to put a stop to the VAT hike taking effect by 1 May.
On Thursday, the Democratic Alliance (DA) indicated it had been approached by the finance minister's legal team to settle its VAT challenge out of court.
Unless a settlement is finalised before then, judgment in the matter is due to be handed down on Tuesday.