On April 1, 2018, VAT in South Africa rose to 15 percent from 14 percent, marking the first time that it has increased since 1993. This VAT increase will affect every aspect of life in the country, including goods and services that are consumed as well as goods and services that are produced within the country’s borders, and goods and services that are imported from elsewhere in the world. One of the biggest concerns about this VAT increase relates to exports, with many people wondering what impact the higher rate of VAT will have on exports to countries outside South Africa’s borders.
What is Value Added Tax?
Value-added tax, or VAT, is a type of consumption tax that is typically levied on goods and services at each stage of production or distribution. The rate of the tax varies by country, but it is usually applied uniformly to all businesses.
How does it work?
What is the SA VAT increase? The Value Added Tax (VAT) was increased by 1 percentage point from 14% to 15% on 1 April 2019. This means that you will now pay more for most goods and services in South Africa. What was the reason for the increase? The increase in VAT is an attempt by the Government of South Africa to reduce its national debt, which is estimated at around R1 trillion.
Will it affect me?
