- VAT Rate Increases: The South African Finance Minister announced a VAT rate increase to 15.5% effective May 1, 2025, and to 16% on April 1, 2026, pending parliamentary approval, which is uncertain.
- Business Adjustments Required: Vendors must assess the impact of the VAT increase on their operations, updating IT systems, pricing, and documentation, while also reviewing contracts and VAT reporting processes.
- Economic Impact Mitigation: The government anticipates that the VAT increase will have a lesser negative effect on economic growth compared to personal or corporate tax hikes, with measures in place to support low-income households through social grants and expanded zero-rated food items.
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Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
