South Africa’s Economic Freedom Fighters (EFF) have initiated legal action to prevent a proposed 4% increase in fuel taxes, scheduled to take effect on June 4, 2025.
The opposition party contends that the hike disproportionately impacts the working class and the impoverished, who are already burdened by escalating living expenses and stagnant wages.
Additionally, the EFF argues that Finance Minister Enoch Godongwana did not adhere to proper parliamentary procedures in implementing the levy.
In response, Minister Godongwana asserts his legal authority to enact the increase and views the EFF’s challenge as an attempt to disrupt the national budget process, which has already undergone revisions due to coalition government disagreements.
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He warns that halting the fuel levy would result in a revenue shortfall of at least 3.5 billion rand ($196 million), necessitating alternative measures such as borrowing or spending cuts.
In March 2025, Minister Godongwana announced that the general fuel levies would remain unchanged for the third consecutive year.
However, a slight increase in the carbon tax element of fuel was implemented, raising the petrol carbon tax from 11 cents to 14 cents per litre and the diesel carbon tax from 14 cents to 17 cents per litre.
Despite this adjustment, the overall fuel tax burden remains significant, with taxes accounting for approximately 28% of the coastal fuel price.
The EFF’s legal challenge underscores the ongoing tensions within South Africa’s coalition government regarding fiscal policies and their impact on the populace.
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As the court deliberates, the outcome could have significant implications for the country’s economic landscape and the government’s approach to taxation and public expenditure.
