Cape Town – The South African Revenue Service (SARS) has welcomed a court ruling that suspends the previously announced 0.5 percentage point increase in the value-added tax (VAT) rate, which was set to take effect on 1 May 2025.
The court’s decision effectively halts the planned rise, meaning the VAT rate will remain at 15% rather than the proposed 15.5%. The ruling provides much-needed clarity for both VAT vendors and consumers, allowing SARS to continue its efforts in ensuring proper administration of the VAT Act.
In a statement, SARS Commissioner Edward Kieswetter expressed satisfaction with the agreement and court order, emphasizing its importance in maintaining the smooth functioning of the tax system.
Media Release: SARS welcomes court order relating to the VAT rate originally announced to come into effect on 1 May 2025 … https://t.co/jg5ykXBPFA pic.twitter.com/uk9m7cJMe1
— SA Revenue Service (@sarstax) April 27, 2025
“This is an important order that provides clarity to SARS to effectively and efficiently administer the VAT Act,” said Kieswetter.
As a result of the court order, all VAT vendors are advised to readjust their systems back to the 15% VAT rate, which was in effect prior to the planned increase. The ruling applies immediately, and vendors must ensure that their systems reflect the correct VAT rate.
Consumers are also urged to remain vigilant, ensuring that they are charged the correct VAT rate of 15%. In the rare instance that they are charged the higher 15.5% rate, consumers should promptly address the issue with the vendor and seek resolution at the point of sale or through mutual agreement.
The suspension of the VAT increase comes as a relief to both businesses and consumers, offering stability as South Africa navigates ongoing economic challenges.
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Compiled by Betha Madhomu
