SARS: FAQ on Increase in the VAT Rate from 1 May 2025

SARS: FAQ on Increase in the VAT Rate from 1 May 2025

• 15 April 2025
• SARS Issues
• South African Accounting Academy

Summary:

SARS has compiled and published 65 Frequently Asked Questions (FAQs) on the Increase in the VAT Rate from 1 May 2025.

Article:

In the Minister’s Budget speech on 12 March 2025, two increases in the standard rate of VAT were announced. The first rate increase of 0.5% applies from 1 May 2025, and the second rate increase of 0.5% will apply from 1 April 2026. The FAQs in this document have been compiled on the basis of questions that vendors and the public at large are likely to have about the implications of the rate increase. However, unless otherwise indicated, this document only illustrates the impact of the first rate increase effective from 1 May 2025. More guidance on the second rate increase will be communicated in due course.

These FAQs have been drafted on the basis of information which was available at the time of announcement and will be updated from time to time as new information comes to light or arrangements are made regarding some of the common practical and administrative challenges. These FAQs are issued based on the Minister’s Budget announcements on 12 March 2025 and subject to Parliament’s legislative process.

The FAQs were drafted purely to assist vendors and the public at large to obtain clarity and to ensure consistency on certain practical and technical aspects of implementing the change to the VAT rate. The FAQs are therefore not intended to be used as legal reference. You can find more information about some of the aspects discussed in this document in the VAT 404 – Guide for Vendors which is available on the SARS website.

Click here to download the 29-page FAQ document:

https://www.sars.gov.za/wp-content/uploads/Ops/Guides/Legal-Pub-Guide-FAQs-VAT-05-FAQs-VAT-Increase-in-the-VAT-Rate-from-1-May-2025.pdf

Relevance to Auditors, Independent Reviewers & Accountants:

• The VAT Act is yet another piece of legislation that your clients must comply with, and which you must assess compliance with.  If they don’t comply with the relevant laws and regulations, you have certain reporting obligations in terms of NOCLAR (NOn-Compliance with Laws And Regulations) – this could include reporting to management, qualifying your audit opinion, reporting a Reportable Irregularity, etc.
• All auditors, accountants, independent reviewers and tax practitioners should be aware of the latest publications issued by SARS to remain up-to-date with the guidance provided therein.
• This document provides guidance on the increase in the VAT rate on 1 May 2025.

Relevance to Your Clients:

• All taxpayers have a duty to comply with the VAT Act, otherwise they could be held liable.
• This document provides guidance on the increase in the VAT rate on 1 May 2025.

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