VAT Increase from 1 May 2025: What Businesses in SA Need to Know
A 0.5% VAT increase will take effect on 1 May 2025, with another to follow in 2026. Learn how these changes impact your business and where to get SARS guidance.
Understanding the 2025 VAT Adjustment
In the Minister’s Budget Speech on 12 March 2025, two upcoming increases to the standard VAT rate were announced. The first increase of 0.5% comes into effect on 1 May 2025, raising the rate from 15% to 15.5%. A second increase of another 0.5% is expected on 1 April 2026.
While both changes were announced together, current guidance focuses on the initial increase happening this year. Businesses need to prepare for the 2025 transition to ensure full compliance.
Why This Matters Now
The VAT rate adjustment is already impacting pricing strategies and accounting systems across industries. Banks and service providers have begun notifying clients, and major accounting platforms are working to implement system changes ahead of the deadline.
Businesses are encouraged to stay up to date with SARS communications, especially regarding:
- Transitional VAT rules
- Invoice timing and split transactions
- Filing requirements and updated forms
Even small oversights can lead to unnecessary penalties or reporting issues, so it’s best to plan ahead.
📄 Access the Official SARS FAQ
SARS has published a comprehensive FAQs document to help vendors and individuals understand how the VAT increase will impact them.
View the official SARS VAT FAQs Doc
Need help updating your VAT settings, adjusting pricing, or preparing your records?
Tlotlomadi Accountants offers practical, localized support to keep your business tax-compliant and stress-free.
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