The Western Cape High Court will hear an urgent application by the Economic Freedom Fighters (EFF) today, seeking to halt the implementation of a fuel levy increase announced by Finance Minister Enoch Godongwana in last month’s Budget Speech.
The proposed hike, set to take effect on June 4, will see diesel prices rise by 15 cents per litre and petrol by 16 cents per litre. The EFF argues that the increase will have severe economic consequences, particularly for low-income households and businesses already struggling with high living costs.
EFF’s Legal Challenge
The EFF filed court papers last week, contesting the legality of the levy increase. The party claims that the finance minister does not have the authority to impose tax hikes without parliamentary approval.
However, Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (OUTA), believes the EFF’s case is weak.
“The minister has always had the power to adjust fuel levies as part of the budgetary process,” Duvenage said. “This isn’t a new practice—it’s been happening for decades.”
Government’s Position
Treasury has defended the increase, stating that failing to adjust the levy would result in a loss of billions in revenue at a time when South Africa faces significant fiscal constraints.
Duvenage acknowledged the difficult position Treasury is in, noting that the country’s high debt levels limit alternatives.
“Government is in a bind—we’re broke,” he said. “While we don’t advocate for higher taxes, a small fuel levy increase is the lesser evil compared to VAT hikes.”
A Broader Debate on Taxation
The case has reignited debates over taxation policy and government spending. OUTA has long called for cost-cutting and improved revenue collection rather than repeated tax increases.
“Instead of raising taxes year after year, government should cut wasteful expenditure and improve efficiency at SARS,” Duvenage argued.
What’s Next?
The Western Cape High Court’s ruling could set a precedent on how tax adjustments are implemented in future budgets. If the EFF succeeds, it may force Treasury to seek explicit parliamentary approval for future levy hikes.
The hearing is set for tomorrow, with a decision expected before the levy’s scheduled implementation on June 4.