{"id":851517,"date":"2026-02-20T07:00:00","date_gmt":"2026-02-20T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=851517"},"modified":"2026-02-19T15:47:57","modified_gmt":"2026-02-19T13:47:57","slug":"vat-increases-are-coming-to-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/851517\/vat-increases-are-coming-to-south-africa\/","title":{"rendered":"VAT increases are coming to South Africa"},"content":{"rendered":"\n

While South African households should not expect an increase in the value-added tax (VAT) rate to be announced in the 2026 Budget Speech, analysts expect a hike at some point in the future.<\/p>\n\n\n\n

The 2025 National Budget faced unprecedented delays after the initial budget in February 2025 included a two percentage-point increase in the VAT rate to 17%.<\/p>\n\n\n\n

A second budget in March 2025 lowered the increase to one percentage point over two years, and almost made its way into law, but was halted by a court order and negotiations between political parties.<\/p>\n\n\n\n

A third and final budget in May 2025 contained no VAT increases, and parliament passed it with the parties in the Government of National Unity (GNU) finally on board.<\/p>\n\n\n\n

Martin Delport, Associate Director: Indirect Tax (VAT) at KPMG South Africa, said that a VAT increase in the 2026 Budget is not on the cards, given the high drama of getting the 2025 Budget through the door.<\/p>\n\n\n\n

Delport said that increasing VAT is a sensitive topic from both political and economic perspectives, but noted that the Treasury has now shown it wants to raise the rate.<\/p>\n\n\n\n

“From our side, we don’t believe it’s a matter of if but a matter of when we will see an increase<\/strong> coming through,” he said.<\/p>\n\n\n\n

He added that the Treasury has also shown a willingness to expand the zero-rated food basket to alleviate pressure on consumers amid the high cost of living.<\/p>\n\n\n\n

However, without an increase in the VAT rate, it is unlikely that the zero-rated food basket will change in 2026.<\/p>\n\n\n\n

“VAT is still one of the most reliable sources of revenue, and with pressure on the fiscus to maintain or even grow revenues, we will see a continued focus on enforcement, compliance and administration.”<\/p>\n\n\n\n

This means there will likely be increased resources from SARS for VAT verifications and audits.<\/p>\n\n\n\n

Treasury is also working on introducing legislation and frameworks relating to e-invoicing that allow vendors to report VAT to SARS in real time. <\/p>\n\n\n\n

“We will see this building momentum in the current year, with additional legislation, concepts, frameworks, and policies being introduced that vendors will need to be aware of and be ready for.”<\/p>\n\n\n\n

While the VAT increase is unlikely, Delport said viewers of the budget speech must keep an eye out for zero-rated items, potential e-invoicing complications, and insights from Treasury.<\/p>\n\n\n\n

He noted that one should look at the National Treasury’s medium- to long-term ideas, as that is where the practical impacts are likely to arise.<\/p>\n\n\n\n

SARS is the main focus <\/h2>\n\n\n
\n
\"\"<\/a><\/figure><\/div>\n\n\n

Mohammed Maiter, Partner \u2013 Tax at KPMG South Africa, also noted that the Budget speech will likely not see any increase in taxes, but rather stricter enforcement of compliance.<\/p>\n\n\n\n

With limited fiscal capacity, SARS will likely enforce its mandate to collect outstanding taxes. This will be in the region of roughly R800 billion.<\/p>\n\n\n\n

Maiter said that taxpayers can thus expect the following: <\/p>\n\n\n\n

    \n
  • Increased audits<\/li>\n\n\n\n
  • Increased verification processes<\/li>\n\n\n\n
  • Faster verification processes<\/li>\n\n\n\n
  • Far lower tolerance for errors<\/li>\n\n\n\n
  • Far lower tolerance for inadequate documentation<\/li>\n\n\n\n
  • Far lower tolerance for the late submission of tax returns<\/li>\n<\/ul>\n\n\n\n

    He added that SARS will increasingly use advanced analytical procedures to identify inconsistencies across available tax information.<\/p>\n\n\n\n

    “I think the message is clear – that taxpayers need to ensure that their tax affairs are up to date. If your tax affairs are not in order, it is most likely that the SARS will come after you,” said Maiter.<\/p>\n\n\n\n

    “To the extent that taxpayers are compliant, it will be important to ensure that taxpayers are in a position to defend the treatment that is adopted internally by themselves.”<\/p>\n\n\n\n

    He believes that tax enforcement will be limited to large corporate taxpayers, but could also include high-net-worth individuals and other taxpayers.<\/p>\n\n\n\n

    Finance Minister Enoch Godongwana will deliver the Budget speech next Wednesday, 25 February 2026, at 14h00.<\/p>\n","protected":false},"excerpt":{"rendered":"

    South Africans should not expect an increase in VAT to be announced in the Budget speech next week, but a hike is still likely in the works. <\/p>\n","protected":false},"author":95,"featured_media":812091,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[1458,3246,7438],"class_list":["post-851517","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-kpmg","tag-sars","tag-vat"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851517","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=851517"}],"version-history":[{"count":9,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851517\/revisions"}],"predecessor-version":[{"id":851564,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/851517\/revisions\/851564"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/812091"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=851517"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=851517"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=851517"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}