VAT does not increase to 15.5%
If you’ve been keeping an eye on the news (or your grocery receipt), you may have heard—South Africa’s Value-Added Tax (VAT) was headed for a 0.5% increase to 15.5%, effective 1 May 2025.
Vat is now set to remain unchanged for 2025 but future escalations are still on the table for future years
A Quick Look at VAT in South Africa
VAT is a consumption tax levied on most goods and services sold in South Africa. It’s a major source of revenue for the government and helps fund public services, infrastructure, and development programs.
Here’s a quick timeline of VAT changes in SA:
- 1991: VAT introduced at 10%
- 1993: Increased to 14%
- 1 April 2018: Increased to 15% (first hike in over two decades)
- 1 May 2025: Planned increased to 15.5% has been postponed
VAT Rates Globally
This a great resource for comparing vat globally https://taxsummaries.pwc.com/quick-charts/value-added-tax-vat-rates. Below is quick VAT comparison.
|
Country |
VAT Rate |
Notes |
|
Hungary |
27% |
Highest standard VAT rate in the European Union. |
|
Denmark |
25% |
Among the highest in Europe. |
|
Sweden |
25% |
Matches Denmark’s rate. |
|
South Africa |
15% |
Increased from 14% in 2018 |
|
United Kingdom |
20% |
Standard rate; some goods/services have reduced or zero rates. |
|
Japan |
10% |
Increased from 8% in 2019. |
|
Australia |
10% |
Known as Goods and Services Tax (GST). |
|
Canada |
5% |
Federal GST; provinces may add their own sales taxes. |
|
United States |
Various |
sales tax varies by state (generally 4%–10%). |
Final Thoughts
Tax changes can be overwhelming, but understanding them is half the battle. The decision to keep VAT unchanged is gives us all a little breathing room and in the bigger scheme of things helps all households big and small.
Need help navigating planning for you or your business? Let’s chat. We’re here to guide you through it all—we make it easy.
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