VAT increase will continue as planned on May 1, a necessary bill is still not given.
Although South Africans pay the value added tax (VAT) over a year, they should not expect any refunds from the government.
Currently, 15% of VAT in South Africa, as declared on May 1, as the Finance Minister Enoch Godongwana has announced, the 0.5% increase.
Another 0.5% increase will bring VAT rate to 16% in 2026/2027 fiscal year.
Concerns about the early application of VAT growth
The parliamentary budget department has issued a bill of 45% of the 2025/2026 VAT increase and payment laws and change of income laws.
The Office said that it could be shaken public participation.
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Therefore, the increase only recommended the implementation after the parliament approves the bill.
If the parliament stays to 12 months to pass the bill, the legislative process is usually completed in October.
Legal grounds for increasing VAT
Gerhard BadenhorstThe director of the tax and exchange management application has been reported since the VAT increase in May 1, as the VAT law allows the tax rate to take effect before the official adoption.
He explained that if the parliament does not accept the law within 12 months or rejects the tax growth, returning to 15% from May 1, 2026.
“It is really an absurd situation. Apparently, VAT rate growth can only be stopped before the legislative amendment of VAT law only since May 1, 2025.
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“If the VAT rate increase in May 1, 2025, it was not only 12 months of the current date of VAT, but not retrospective,” Badenhorst Citizen.
Desir, who is a tax advisor from Webber Welzel lawyers, shared similar feelings, stressed that it was applied once, 0.5% cannot be redeemed.
“It cannot be provided, but the legislation that supports the support of the legislation is suspended if the announcement date is not accepted by the parliament within 12 months,” he said.
It is not returned because VAT is paid
Kruger also rejected the likelihood of the government to return the government for the additional VAT they pays to the additional VAT.
“There will never be a situation where the increase is retrospective – so there is no situation where the return of additional VAT will be returned.”
Badenhorst said: “It will not be anything to pay VAT (South African Revenue Services) SARS (South African Income Services) in terms of VAT acts.”
Business matching costs
South African enterprises will face significant compliance problems and expenses for VAT growth.
“Enterprises, accounting, shipping and reporting systems are severely affected as it is a short window period to be ready for a time (mainly six weeks) to increase the VAT ratio.
“These amendments are a great cost and effort and costs should be absorbed by work within the expenses to meet the VAT Law.
Later, many VAT changes, including many VAT changes, including 15%, will increase in the range of 12 months, the costs of enterprises will increase.
“We will now grow two ratio growth and perhaps a 12-month-long space, we will increase in 15%, the cost of enterprises will increase,” Badenhorst.
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“The transition will be applied in the application of VAT rules, especially in certain areas, especially in the application of the Financial Services Sector and Non-Life Insurance Industry.
“If the enterprises do not comply with these rules, they continue to risk punishments and interests,” Badenhorst said.
Political and economicities
Moreover, independent economic analyst, professor Bonke Dumisa, the results of increasing an increase of 0.5% in front of the parliament budget or related legislation, he said.
This proposed that the action can seem like a “conflict” and decide to reject their growing rivals.
“However, most members of parliament estimate that they do not want 0.5% and 0.5% VAT” Citizen.
“Unfortunately, after the implementation of VAT, South Africans will be able to pay and pay for,” Professor donated.
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