The VAT Increase was reversed. Here’s what you need to know (and what to do next)

Nicole
Nicole
3 min read
Apr 24, 2025
The VAT Increase was reversed. Here’s what you need to know (and what to do next)

You might’ve heard the news already… the government just made a BIG U-turn.

The proposed VAT increase from 15% to 15.5%, which was supposed to kick in on 1 May, has officially been cancelled.

This decision came late Wednesday night, with the Treasury releasing a statement juuuust after midnight.

After some pretty strong pushback from political parties and advice from Parliament, the increase is off the table (for now)

If you’re running a business, here’s what that means for YOU…

So, what exactly happened?

The government was planning to raise VAT by half a percent starting next month.

That might sound small, but it would’ve had a pretty big ripple effect on pricing, invoicing, tax returns, and overall costs (especially for small businesses)

Members of the government pushed back HARD, even threatening legal action.

Many argued that the increase would hurt low-income households and entrepreneurs already trying to stay afloat.

After a lotttttt of back and forth, the Treasury decided to reverse the decision and now the VAT rate will stay at 15%.

What does this mean for your business?

Here’s the good news:

You don’t need to change anything in your VAT processes right now

So…

  1. You can keep charging VAT at 15%.
  2. You don’t need to update your point-of-sale system or invoicing software.
  3. You won’t need to redo your product pricing.
  4. You can carry on with your usual VAT submissions, with no adjustments required.

But there’s something business owners need to think about with all of this chaos…

This back-and-forth shows us just how quickly things can change.

One minute you're adjusting for a new rate, the next it's scrapped.

And that uncertainty is stressful, especially when you’ve got a business to run.

What should you do now?

Even though this increase was cancelled, it’s a good moment to check in on your VAT setup.

Ask yourself these questions:

  1. “Am I properly registered for VAT?”
  2. “Am I submitting my returns on time?”
  3. “Do I have all my VAT invoices in order if SARS ever audits me?”
  4. “Would I be able to adapt if the VAT rate does change in future?”

If you’re unsure about any of those, don’t stress, you’re not alone.

Many small business owners are doing their best to keep up with all the changes, and it’s A LOT.

But luckily you don’t have to do it alone.

Need help staying compliant?

At Govchain, we help you stay on top of VAT, compliance, CIPC returns, and all the admin that comes with running a business in South Africa (even bookkeeping!)

So when changes like this come up (whether it’s a new VAT rate or an update from SARS or CIPC) you’ll already be covered and you don’t have to panic.

You’ll have less stress and more time to focus on growing your business.

Want to make sure your VAT and tax setup is sorted?

Check out our services and see all the ways we can help you and your business to live your best, stress-free life.

If you’re feeling unsure, our Support team is always happy to help!

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