VAT Rate Changes To 15%

The increase in the VAT rate from 14% to 15% was arguably the biggest announcement in the 2018 Budget Review from a tax perspective. This change in VAT rate will impact consumers directly as the  cost of goods or services increase from 1 April 2018. However, VAT vendors may also face some  transitional challenges as a result of the change in the rate. These include determining the  appropriate rate of tax on supplies made around 1 April 2018 and claiming input tax at the correct rate.

The National Treasury announced as part of the Budget Review 2018 that with effect from 1 April 2018 the VAT rate in South Africa will be increased from 14% to 15%. This announcement was welcomed by some as an increase in the VAT rate was seen as one of the ways in which the budget shortfall could be funded in the least damaging way to the economy. However, it appears as if there is also some pressure mounting on government due to the regressive nature of the tax and the impact of the