Relief sought by DA and EFF ‘lacks merit’ – Godongwana.
Finance Minister Enoch Godongwana and National Treasury Director-General Duncan Pieterse are both defending the Vat hike in court. Picture: GCIS
Section 7 affords the minister temporary and conditional authority to adjust the Vat rate for 12 months, however, it remains subject to confirmation from parliament. Godongwana states that if no legislation is passed within 12 months, the temporary rate lapses and the application of the 15% in Section 7 resumes.Gerhard Badenhorst, tax director at Cliffe Dekker Hofmeyr, says businesses incur substantial costs in order to implement the Vat rate increase. It takes significant time and effort to amend systems and procedures.
However, it is only for 12 months, and parliament must confirm it within that time. If not, the increase lapses.
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