EFF demands answers from SARS for VAT comment

THE EFF has written to the South African Revenue Service (Sars) seeking clarity on VAT increase reversal.

In a letter dated 26 April 2025, addressed to Sars Commissioner Edward Kieswetter, the party questions a recent media release issued by the revenue service concerning the "practical implications" of Finance Minister Enoch Godongwana's decision to reverse the VAT rate increase.

EFF chairwoman and parliamentary Chief-Whip Nontando Nolutshungu stated that while the party appreciates the necessity of administrative guidance to vendors and the public during times of uncertainty, it is concerned about the broader implications of that communication.

"There is currently considerable political expediency and legislative uncertainty surrounding the 2025 Budget process, including the fiscal framework, revenue proposals, and withdrawal of key fiscal instruments," she said.

"Against this backdrop, it is vital that Sars, as an independent tax administration authority, avoids being entangled, even inadvertently, in political decisions that are not yet lawfully finalised. The credibility of Sars as a neutral and professional institution must be vigilantly protected at all times, particularly when executive actions are under legal and parliamentary scrutiny."

Nolutshungu requested urgent clarity on what legislative or regulatory basis Sars determined it appropriate to issue a binding instruction to all VAT vendors to reverse or suspend VAT rate adjustments.

"In particular, we seek to understand how such administrative instructions could be issued when Parliament has not yet lawfully repealed or amended relevant fiscal framework through proper legislative processes as required by Section 77 of the Constitution and the Money Bills Amendment Procedure and Related Matters Act and the Revenue Laws Amendment Bill cited by the minister remains before Parliament and has not yet been passed or enacted into law," she said.

ALSO READ | ANC and DA try to fix GNU cracksOpens in new window

Nolutshungu cautioned that perception, or reality, of Sars acting on executive announcements rather than duly passed legislation risks undermining public trust, legal certainty, and Sars' institutional integrity.

She further expressed the EFF's alarm at the "absurdity" of Sar's pronouncement permitting two VAT rates, 15% and 15,5%, to operate simultaneously until 15 May 2025.

Nolutshungu pointed out that this is reckless and sows confusion among vendors and consumers.

She said it also creates fertile ground for exploitation, price manipulation, and criminality.

"Such an approach undermines the very principles of tax certainty and uniformity that Sars is constitutionally obliged to uphold. We caution Sars, in the strongest terms, not to venture into uncharted and unlawful territory under the guise of expediency. Sars must anchor its actions firmly within the law, not political pressure."

She warned the EFF may escalate the matter should Sars fail to provide a satisfactory and lawful explanation within 24 hours of receipt of its letter.