Proposed 15.5% VAT Increase Withdrawn: What This Means for You

Recently, the South African Parliament tabled a proposal to increase the VAT rate from 15% to 15.5% — a move that would have marked the first VAT hike since 2018. The proposal, aimed at boosting state revenue and addressing the national fiscal deficit, sparked widespread concern among individuals, businesses, and tax professionals alike.

Good news: The proposed increase has been withdrawn at the last minute.

Following significant pushback from various sectors, including within Parliament, the decision was made to shelve the proposal for the time being. While this brings immediate relief, it serves as a clear reminder that fiscal policy remains fluid in today’s economic climate.

What does this mean for you?

• The VAT rate remains at 15%, so no immediate changes to your pricing, invoicing systems, or budgets are required.

• This event is a timely reminder to plan proactively, as shifts in tax policy can occur quickly and have real financial implications.

• Should a similar proposal be reintroduced, BVSA will provide clients with timely updates and guidance to adapt accordingly.

How BVSA helps you stay prepared:

We keep a close eye on legislative developments and ensure our clients are informed and prepared for any changes. We can assist you with:

• Reviewing your cash flow in light of potential tax changes

• Adjusting your pricing and invoicing models where necessary

• Realigning your financial planning for the year ahead

If you have any questions about how this proposed VAT increase — or other legislative changes — might affect your personal or business finances, please don’t hesitate to contact your BVSA advisor.

Let’s plan ahead – proactive financial management is your strongest asset.

info@bvsa.co.za