South Africa’s top court has rejected a legal challenge by the Economic Freedom Fighters (EFF) seeking to halt a proposed fuel tax hike outlined in the country’s latest budget.
The left-wing opposition party, the EFF, led by Julius Malema, argued that the tax hike would place a disproportionate burden on low-income earners and claimed that Finance Minister Enoch Godongwana failed to follow proper parliamentary procedures when introducing the measure.
Despite the objections, the court ruled in favour of the government, allowing the 4% increase in petrol and diesel fuel taxes to come into effect on Wednesday.
In his statement to the court, Minister Godongwana defended the legality of the increase, saying it was within his authority. He also accused the EFF of trying to undermine the broader national budget process, which has already been revised twice due to internal coalition disagreements.
Godongwana warned that blocking the fuel tax would create a revenue shortfall of at least 3.5 billion rand (about $196 million) and further complicate efforts to stabilize public finances.
The Ministry of Finance has abandoned a plan to increase the value-added tax after a backlash from coalition partners including the Democratic Alliance and other political stakeholders.
Meanwhile, in a separate announcement on Tuesday, the government said regulated gasoline and diesel prices would fall in June. Officials cited lower international crude oil prices and a stronger rand as key factors helping offset the impact of the fuel tax hike.
As South Africa grapples with rising debt levels, investors are closely watching for signs that the government can balance fiscal discipline with economic relief measures.