The Commissioner of the South African Revenue Service (SARS), Edward Kieswetter, has welcomed the agreement between the parties and the court order to suspend the 0.5 percentage point increase in value-added tax (VAT).
The VAT increase was initially announced to come into effect on 1 May 2025.
The Minister of Finance and main respondents in the matter, the Democratic Alliance and the Economic Freedom Fighters (EFF), agreed to have the matter settled out of court, and the Western Cape High Court subsequently ratified the agreement on 27 April 2025.
“This is an important order that provides clarity to SARS to effectively and efficiently administer the VAT Act. It also has practical implication for consumers and VAT vendors charged with managing VAT.
“The court’s order suspends the 0.5 percentage point increase that was originally announced to come into effect on 1 May 2015 and there is, therefore, no basis for VAT vendors to implement an increase of VAT rate,” SARS said.
The revenue service urged all vendors to readjust their systems back to 15%, while also calling on consumers to ensure that they are charged the correct VAT rate of 15%.
“In the unlikely event they are charged 15.5%, consumers should bring this to the attention of the vendor and ensure that this is resolved at the point of sale or otherwise by mutual agreement,” SARS said.
Meanwhile, the Minister of Finance, Enoch Godongwana has agreed to the court order suspending his decision to increase the VAT rate by 0.5 percentage points.
READ | Government agrees to suspend VAT increase decision
“[Minister] Godongwana welcomes the court order, as it is entirely consistent with his announcement on 23 April 2025 to suspend the VAT increase. Having already announced the withdrawal, the Minister felt that he would no longer have cause to continue with the court case.
“The context to the suspension of the increase is set out in an affidavit filed earlier on Sunday by the Minister in response to the Democratic Alliance’s (“the DA”) supplementary affidavit filed on 25 April 2025,” National Treasury said in a statement. - SAnews.gov.za
