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SARS_VAT Pocket guide on VAT increase on 1 May 2025
- 15 April 2025
- SARS Issues
- South African Accounting Academy
Summary:
SARS has published a VAT Pocket guide on the impending VAT increase on 1 May 2025.
Article:
The Minister of Finance announced the value-added tax (VAT) rate increase in his budget speech on 12 March 2025.
The standard rate of VAT will change from 15% to 15.5% with effect from 1 May 2025. This means that from 1 May 2025, all taxable goods or services supplied by vendors, goods imported, as well as certain services supplied by non-residents to residents for non-taxable or private use (imported services), are subject to the VAT rate of 15.5%. The Minister of Finance also announced that the VAT rate will increase from 15.5% to 16% effective from 1 April 2026. More details in this regard will be communicated once the relevant legislation is promulgated. The illustrations in this guide therefore only relate to the rate increase effective from 1 May 2025.
Some of the most important aspects to consider as a result of the increase in the VAT rate are briefly discussed in this pocket guide.
This pocket guide is not intended to be used as legal reference. For more information, refer to the FAQs published on the SARS website.
Click here to download the 2-page VAT Pocket Guide:
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 summary 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 summary guidance on the increase in the VAT rate on 1 May 2025.