South Africa’s Economic Freedom Fighters (EFF) have filed an urgent application with the High Court to suspend a proposed 4% increase in the national fuel levy, which is scheduled to take effect on Wednesday. The opposition party argues that the increase imposes a disproportionate burden on low-income citizens already contending with the rising cost of living, stagnant wages, and broader economic hardship.
In a statement issued ahead of the court hearing in Cape Town, the EFF characterised the tax hike as “unjust” and alleged that Finance Minister Enoch Godongwana failed to adhere to proper parliamentary procedure in proposing the measure. The levy adjustment, announced during the national budget speech last month, affects both petrol and diesel pricing and forms part of broader efforts to stabilise state revenue streams.
In a sworn affidavit submitted to the court, Minister Godongwana defended the increase, asserting that the Treasury holds the authority to revise fuel levies as part of its fiscal management strategy. He further contended that the EFF’s legal challenge is politically motivated and could impede the broader budgetary process, which he noted has already undergone two rounds of revision due to intra-coalition negotiations.
Should the court grant the EFF’s request and block the tax implementation, the Treasury forecasts a shortfall of approximately 3.5 billion rand (equivalent to US$196 million). According to Godongwana, such a deficit would necessitate offsetting measures, potentially through increased borrowing, additional taxation, or the curtailment of public spending. This comes after the Finance Ministry shelved a proposed rise in value-added tax following pressure from the Democratic Alliance—the coalition’s second-largest party—and other political actors.
The proposed fuel levy is a key revenue measure intended to support fiscal consolidation amid mounting public debt, which has seen a substantial increase over the past two decades. Investors and international observers are closely monitoring the situation, as concerns mount regarding the state’s ability to curb expenditure while maintaining social and economic stability.
South Africa’s fiscal environment remains precarious, with the National Treasury under pressure to deliver on revenue targets without exacerbating socio-economic inequalities. The fuel levy, a component of indirect taxation, disproportionately affects lower-income households due to its regressive nature, thereby intensifying the political debate over equitable taxation and fiscal justice.
While the court deliberates on the EFF’s legal motion, the broader policy implications continue to reverberate through South Africa’s political and economic landscape. The outcome of this challenge may set a precedent for future fiscal decisions and the degree of parliamentary scrutiny they attract.
