Two VAT rates will be applicable after April 1

Friday, March 12, 2021

Tough decisions: Finance and Economic Development minister, Thapelo Matsheka unveiled a tough budget last month PIC: KENNEDY RAMOKONE

Following the announcement by the Minister of Finance & Economic Development that the Value Added Tax (VAT) rate will increase from 12% to 14% effective April 1, 2021, this will mean that for some time, some businesses will need to apply both 12% and 14% on sales.

The VAT Act has what are referred to as transitional measures whenever a VAT rate changes and these, by default, result in the application of two VAT rates for a given time. In this article, the phrase ‘effective date’ shall be used to mean April 1, 2021, which is the date when the VAT rate is set to increase to 14%. The instances where this will apply are stated below.

Goods sold before 1.04.21

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Two VAT rates will be applicable after April 1

Following the announcement by the Minister of Finance & Economic Development that the Value Added Tax (VAT) rate will increase from 12% to 14% effective April 1, 2021, this will mean that for some time, some businesses will need to apply both 12% and 14% on sales.

Advancing social justice and decent work in Africa: A blueprint for change

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Stakeholders must step up veggie supply