SARS has assured consumers that vendors have no legal basis to implement the higher rate and is vowing to monitor compliance.

The Western Cape High Court issued an order suspending the 0.5% VAT increase in a case brought by the Democratic Alliance and the Economic Freedom Fighters.

The Finance Ministry had earlier withdrawn the VAT hike.

Kieswetter says it is back to the drawing board as he calls for an open process to the budget.

He adds, "Everything has to be back on the cards now and I don’t want to pre-empt where the minister will conclude but I know having spoken to the minister, that we have to have an absolute open mind and consider all possibilities."

Kieswetter further says, "Ultimately it is about the choice that the minister made of physical consolidation, which means we do not have open ended access to debt and if we also are constraining tax increases, then what’s left for us is to seek alternative ways of collecting tax more efficiently."  

--SABC--