26 February 2018

South Africa's VAT rate to increase from April 1, 2018

A Value Added Tax (VAT) rate increase has been expected in South Africa for many years. The Government has not previously taken this action due to the effect of a rate increase on the lower economic levels of the population. However, the country's current budget deficit requires action to be taken as a VAT rate increase will generate significant revenue. The 1% rate increase, from 14% to 15%, effective from April 1, is expected to generate an additional ZAR22b (approx. US$1.89b) for the Government. The increase was announced on February 21, in the Government's 2018 Budget review.

An Indirect Tax Services group Alert, attached below, provides additional details.

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ATTACHMENT

Document ID: 2018-0427