Minister of finance Enoch Godongwana has told parliament that the cabinet has set up a committee to investigate whether the fuel levy would need to be cut to ease fuel price risks as a result of the US-Iran war.
The minister was responding to questions in the National Assembly on Wednesday, although the original question related to the unsuccessful VAT hike proposal Godongwana presented in the first two iterations of last year’s budget speech.
As question time went on, a standoff between the finance minister and EFF MP Nthako Matiase led to the minister standing his ground on the line of questioning. Matiase asked the minister if he would consider cutting the fuel levy to ease price shocks in the country, saying that if the minister failed to answer the question, he would be “provoking” EFF MPs.
“Do not threaten [me] about provocation. I’ve got to answer the questions that are posed to me that are relevant … Despite this spat, I was going to be generous to you. Now you want me to withdraw that generosity.”
Matiase responded with heckles of “don’t patronise us”, to which the minister shot back, “I am not patronising you”, saying he would not be led by threats of provocation.
The minister said a cabinet committee would look into the fuel price risks, after which he and the minister of mineral and petroleum resources, Gwede Mantashe, would brief the cabinet on its outcomes and recommendations.
“Although this question is different [from the original question], I am going to answer it, because of its public interest and say cabinet has set up a committee ... to look at the impact of the war in general. Among the terms of reference is to say what it suggests the government should do on the fuel price.”
The original question came from EFF MP Omphile Maotwe, who asked the minister whether, considering that the Western Cape High Court had ruled parts of the Value Added Tax Act to be invalid and inconsistent with the constitution, he would appeal the judgment.
The minister said, “I have sought legal advice and will make a decision based on that advice. At the moment, I have not made that decision.”
In a supplementary question, Matiase said, “Don’t you think that you should be prioritising and upholding the constitution rather than defending and maintaining the fiscal measures that are rigid in their nature, are inconsistent with the constitution, and worse, do not advance the aspirations of the working class and the poor?”
Godongwana replied, maintaining that he did not wish to pre-empt the legal advice that he would receive in due course, saying he wished to ensure that his next course of action was legally and constitutionally consistent.
“The honourable member is asking me a moral question, and I am dealing with a legal issue. And that legal issue suggests that I am not making any decision [whether] I am going to continue [with the VAT hike] or not.
“All that I’m saying is that I’m waiting for a legal opinion which will guide me, even if I were to comply with the court decision. The court requires me [within] 24 months to make the necessary changes in the act. So, even if I were to do that, I would still need a legal opinion to proceed in that direction.”
Asked if other tax proposals were on the table to make up for revenue lost due to the VAT hike not being realised, Godongwana said this would depend on what legal advisers said about the existing high court judgment.
DA MP Mark Burke asked the minister if he planned to use his powers to decrease the fuel levy before fuel prices inevitably go up as a result of ongoing geopolitical tensions, given that the courts had clarified that the minister had the power to raise or decrease fuel levy prices.
Godongwana replied: “I’m not dealing with the fuel levy now. I’m dealing with the question that arises after the VAT case … “
Rise Mzansi MP Magashule Gana asked the minister how he would ensure that a national gambling tax would not be subjected to protracted litigation aimed at delaying its implementation. Godongwana took issue with MPs’ attempts to ask supplementary questions through a question about a ruling on the VAT hike proposal.
The minister said the question was irrelevant to the current discussions.
TimesLIVE
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