The Chairperson of the DA’s Federal Council, Helen Zille, says the party’s court case against the VAT hike was pivotal in Finance Minister Enoch Godongwana’s about-turn on the issue.

Exactly a week ago, Godongwana was adamant in his answering affidavit that the 1 May VAT hike would be implemented.

But late last night, Zille says she got a phone call from the DA’s lawyers saying Godongwana wants to settle the matter out of court.

Zille says the Minister realised he would be beaten in court.

“The approach by lawyers acting on behalf of the Minister of Finance with a proposal for an out-of-court settlement to scrap VAT marks a critical turning point in this battle. It is now clear that Treasury had no choice but to reverse its decision in the face of our relentless and strategic legal pressure.”

She says the Minister’s backtracking underscores the very point made in the DA’s court application: that he had attempted to exercise unconstitutional powers to impose or withdraw VAT unilaterally.

Zille says this is a major victory for the DA and, more importantly, for millions of South Africans.

“It is one of the moments that we can look back and say what the 2024 Elections actually meant. It gave us the balance of power in Parliament, which enables us to take a strong stand to be the voice of South Africans to stop the things that citizens don’t want.”

But Zille says there are still a few hurdles to cross before the entire VAT debacle can be laid to rest.

She says the DA is currently awaiting a formal written settlement offer before responding to the Minister’s request.

“While this represents a significant step toward stopping the VAT hike, the process is not yet complete. A final court order and a pronouncement on the validity of the fiscal framework by the Speaker must still follow. Treasury’s retreat is not a reconsideration. It is a retreat born of necessity in the face of likely legal defeat.”

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The EFF, who was also in court with the DA calling for the scrapping of VAT, has welcomed the neas, and has called for the immediate resignation of the Minister of Finance and the Director General of the National Treasury.

The party argues this entire budget fiasco shows the Minister and his Director General are “out of depth and pose a threat to the economic stability of the country and, by consequence, are a threat to the livelihoods of South Africans.”

Meanwhile, ActionSA has also claimed victory.

“We said there would be NO VAT increase, and we delivered on our promise. As ActionSA, we will continue to fight to ensure that you, South Africans, are protected from unnecessary tax hikes.”

WATCH: Helen Zille briefs the media after the announcement that the VAT hike will not be implemented: