SARS Confirms: VAT hike is dead - but the fallout is just beginning
The South African Revenue Service (SARS) has confirmed that the planned 0.5% increase in the Value Added Tax (VAT) rate, initially scheduled for May 1, 2025, will not proceed.
This decision follows a recent announcement by Finance Minister Enoch Godongwana, who decided to reverse the increase in light of ongoing parliamentary deliberations and public feedback.
On Friday, SARS Commissioner Edward Kieswetter emphasised that the tax authority is committed to ensuring a smooth transition and compliance with the new direction.
"While many vendors and consumers have invested time and resources preparing for the increase, we acknowledge the importance of stability and clarity in the tax environment," Kieswetter stated.
"The reversal is detailed in the government's notice published on April 24, 2025, which also introduces the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill in Parliament.
Kieswetter said the bill is expected to be passed soon, adding that the new measures, which include specific guidelines for VAT vendors, will take effect on May 1, 2025.
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