The South African Revenue Service (SARS) has announced that the VAT rate increase from 14% to 15% effective April 1, 2018, is still moving forward. Under the South African Value-Added Tax Act 89 of 1991, Section 7(4), the Minister of Finance has the authority to announce in his budget speech a change in rate for VAT, along with an effective date for that change. This change is effective for a period of 12 months, until Parliament takes action.
In his 2018 Budget Speech, Minister Gigaba announced that the VAT rate was to increase to 15% starting April 1, 2018. Although Parliament has yet to rule on this increase, it will go into effect at that time and will remain effective until legislative action is taken, or the period of 12 months expires.
SARS has published documentation explaining the VAT increase, which can be found here. In addition, information and supporting documents for the Minister of Finance's Budge Speech 2018 can be found here.
About the Author
Katie Smethurst is a Junior Regulatory Counsel at Sovos. Within Sovos’ Regulatory Counsel function, Katie focuses primarily on international and U.S. based indirect tax research and analysis. Katie is a member of the Massachusetts and New Hampshire Bars, earned her B.A. from Roger Williams University and earned her J.D. from Suffolk University Law School.More Content by Kaitlyn Smethurst