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04 April 2025

South African VAT rate increase to proceed

  • The South African Government approved a value-added tax (VAT) rate increase to 15.5%, effective from 1 May 2025.
  • An additional increase of 0.5% will raise the VAT rate to 16%, effective from 1 April 2026.
  • Businesses must prepare for compliance with the new VAT rates.
 

On 2 April 2025, the South African Government of National Unity voted in favor of the budget presented by the South African Finance Minister on 12 March 2025, which includes the proposed VAT rate increase. As a result, the VAT rate increase will proceed. (For more details on the budget, see EY Global Tax Alert, South African VAT rate set to increase by 0.5% from 1 May 2025 and another 0.5% from 1 April 2026, dated 14 March 2025.)

Effective dates and rates:

  • The new VAT rate of 15.5% will be effective from 1 May 2025.
  • The additional increase of 0.5% to a rate of 16% will be effective from 1 April 2026.

Implications

Companies should take the necessary steps to prepare for this change and confirm compliance with the new VAT rate.

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Contact Information

For additional information concerning this Alert, please contact:

Ernst & Young Advisory Services (Pty) Ltd., Johannesburg

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor

Document ID: 2025-0819

 

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