Sars: How to deal with the VAT-on, VAT-off as a business

The latest news is, of course, that the VAT increase has been taken off the table.

Read more: VAT increase withdrawn, expenditure cuts on the cards

This has caused some frustration for VAT vendors, and small to medium businesses in particular.

Read more: VAT debacle shines a light on a fragile coalition – and R75bn question remains

South African Revenue Service (SARS) Commissioner Edward Kieswetter says the decision has significant practical implications for VAT vendors and consumers.

“We acknowledge that vendors and consumers have invested in preparing for an increase in VAT during a period of uncertainty from Parliament’s deliberations and public comments,” he said.

In light of the VAT increase walk-back and the government notice published on Thursday, 24 April, Kieswetter says the following measures will apply to all VAT vendors, with effect from Thursday, 1 May:

1. VAT vendors who have not implemented the change in the VAT rate — should stop all development in this regard.


2. Vendors are expected to charge VAT at the rate of 15% and not 15.5% for the relevant goods and services as per the VAT Act.  Vendors may use limited time to adjust their systems accordingly, and report and pay the VAT required.


3. If a vendor is not able to revert to the 15% rate, due to complex system changes that may be needed, such supplies and purchases must be reported and accounted for at the 15.5% rate until such time that they are able to make the necessary system adjustments. The deadline to complete any necessary VAT system adjustments is Thursday, 15 May 2025.


4. On the VAT return forms, VAT transactions which were charged at 15.5% must be reported in field 12 (for output tax) and field 18 (for input tax).


5. Adjustments in the form of refunds of the 0.5% rate to customers must be reported in field 12, and refunds from suppliers must be reported in field 18.


6. The VAT return declarations made will be taken into consideration when verifications and/or audits on the affected VAT tax periods are conducted.


7. The VAT returns that are to be submitted will continue to calculate the VAT auto-calculation using the 15% rate from tax periods or months commencing 1 May 2025.


8. Vendors who have already implemented both the rate changes and the Zero-Rating are encouraged to reverse those changes before 1 May 2025.