VAT stays at 15% — proposed increase reversed
Treasury withdrew the 1 May 2025 VAT increase. The standard rate stays at 15% for 2026/27 and beyond.
What changed
The March 2025 Budget had proposed a phased VAT increase: 15% → 15.5% from 1 May 2025, then 15.5% → 16% from 1 April 2026. After political opposition, court challenges, and a coalition standoff, the Finance Minister tabled the Rates and Monetary Amounts and the Amendment of Revenue Laws Bill (B14-2025) on 24 April 2025 maintaining the rate at 15% indefinitely.
VAT remained 15% on 1 May 2025 and stays at 15% for the 2026/27 tax year. The proposed two-step increase has been formally withdrawn, not deferred.
What did change about VAT
While the headline rate is unchanged, the 2026 Budget did increase VAT registration thresholds, effective 1 April 2026:
- Compulsory registration: R1,000,000 → R2,300,000.
- Voluntary registration: R50,000 → R120,000.
Both thresholds use the same 12-month rolling-supply test as before. See our VAT-registration guide for the full mechanics.
What we updated (and what we didn't)
No calculator changes were needed for the rate reversal — the VAT calculator always used 15%. Threshold copy on the registration learn article was updated separately for the 2026 Budget changes (R2.3m / R120k).