Relief for SA Businesses: VAT Hike Called Off — Here’s What You Need to Know

If you’ve been bracing for a VAT increase, you can breathe a sigh of relief. The South African government has officially scrapped the proposed 0.5% VAT hike that was set to take effect on May 1, 2025.

Why It Matters:

For business owners, especially SMEs already under pressure, the increase would have raised the VAT rate from 15% to 15.5%—a move that could have pushed up prices, complicated accounting systems, and reduced consumer spending. But thanks to feedback from the public, parliamentary committees, and fiscal review processes, the National Treasury has decided to cancel the hike.

What It Means for You:

✅ No need to update your accounting systems for a new VAT rate

✅ No change in your VAT invoicing or pricing

✅ Temporary financial breathing room—but stay alert for new fiscal measures

The Treasury warns that a R75 billion shortfall now looms. This means other changes may be on the horizon, and businesses should keep an eye on future announcements and budget adjustments.

How MMT Can Help:

While the VAT rate remains unchanged, the importance of accurate record-keeping, up-to-date tax filings, and proper financial forecasting has never been higher. At MMT Financial Services, we assist businesses with:

• VAT submissions and compliance

• Tax planning and consulting

• Bookkeeping and monthly management accounts

• CIPC compliance to avoid penalties

• Strategic advice for uncertain fiscal times