- SARS discussed the procedural issues related to canceling the VAT hike on 1 May 2025, acknowledging the pain it caused.
- Finance Minister Godongwana initially proposed increasing VAT from 15% to 16% by 2026, with a 0.5% increase on 1 May 2025.
- The decision was reversed due to public criticism, affecting VAT vendors.
- SARS will adjust to accommodate the change, noting vendors and consumers prepared for the increase amid uncertainty.
- From 1 May 2025, vendors must charge 15% VAT, not 15.5%, and adjust systems accordingly.
- If unable to revert to 15%, report at 15.5% until adjustments are made by 15 May 2025.
- VAT transactions at 15.5% must be reported in specific VAT return fields.
- Refund adjustments must also be reported in these fields.
- VAT returns will calculate VAT at 15% from 1 May 2025.
- Vendors who changed rates are encouraged to reverse them before 1 May 2025.
- SARS aims to provide clarity to vendors.
- The Bill retaining the VAT rate at 15% is unlikely to be approved before 1 May 2025.
- The original increase to 15.5% remains in force until the Bill is promulgated.
- PwC noted price difficulties with the 15.5% rate from 1 May 2025.
- National Treasury plans to backdate the rate to 15% once the Bill is passed.
Source: businesstech.co.za
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.
