South Africa’s 2026 Budget will focus on whether VAT can keep pace with a digitised economy rather than on rate hikes. A proposed two‑percentage‑point increase was tabled and rejected in 2025, and the Finance Minister confirmed that VAT rate increases for 2025/26 and 2026/27 have been dropped. The Treasury is examining how digital services supplied by foreign providers are taxed and whether the current framework captures modern consumption.
A two‑percentage‑point VAT increase was tabled in 2025 but was rejected, causing a delay in the Budget process.
The Budget Speech is scheduled for 25 February 2026.
Over the past 12 years, South Africa introduced three amendments that broadened definitions, expanded registration requirements, and widened the net to ensure VAT follows the end‑consumer of digital services.
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EY · about 13 hours ago
EY discusses the e-invoicing requirements for South Africa, outlining what CFOs and COOs should consider to comply with the new digital invoicing rules.
SABC News · about 14 hours ago
The Western Cape High Court declared Section 7 of South Africa's VAT Act unconstitutional, ruling that the Minister of Finance cannot unilaterally raise the VAT rate. The court imposed a 12‑month period before Parliament can confirm or reject any VAT rate adjustments, and the proposed 1% increase announced in the 2025 Budget Speech was withdrawn.
BusinessDay · 6 days ago
Finance Minister Enoch Godongwana raised South Africa’s VAT registration threshold from R1 million to R2.3 million in the 2026 budget speech, easing compliance burdens for SMBs and encouraging digital growth. The move removes a key growth constraint and signals a broader push toward digitalisation and innovation.
Daily Dispatch · 8 days ago
South Africa’s 2026 Budget lifts the VAT registration threshold from R1 million to R2.3 million, easing compliance for small businesses. The announcement also notes a 21‑cent per litre increase in fuel levies, while the threshold had remained frozen for fifteen years. The move is seen as a relief for SMEs but is framed within broader fiscal and infrastructure challenges.
Moneyweb · 10 days ago
South Africa’s Finance Minister announced that the VAT registration threshold will rise from R1 million to R2.3 million, and the turnover‑tax limit for very small businesses will also be lifted to R2.3 million. The change, first made in 2009, also removes the restriction on tax year‑end dates, easing compliance burdens for small firms. The adjustment aligns with inflation expectations and aims to encourage entrepreneurship.
Moonstone · 10 days ago
South Africa will raise the mandatory VAT registration threshold from R1 million to R2.3 million and the voluntary threshold from R50 000 to R120 000, effective 1 April 2026. The annual turnover tax limit will also rise from R1 million to R2.3 million. These changes aim to adjust for inflation and support small businesses.
