VAT - The Africa Tax Review

Ghana Overhauls VAT Framework as Parliament Passes New 2025 Bill

November 28, 2025November 28, 2025 - by Jeremiah Amosu - Leave a Comment

Ghana Overhauls VAT Framework. Ghana’s Parliament has passed the Value Added Tax (VAT) Bill, 2025, introducing one of the most significant reforms to the country’s consumption-tax framework in over a …

The South African government has announced a planned increase in the Value-Added Tax (VAT) rate as part of its fiscal policy adjustments for the 2025-26 tax year. The proposal, outlined in the 2025 budget speech, has sparked debate among lawmakers and stakeholders, with concerns over its economic impact and parliamentary approval timeline. VAT Rate to Rise in Two Stages Effective May 1, 2025, the standard VAT rate will rise from 15% to 15.5%. A further increase to 16% is scheduled for April 1, 2026. The staggered adjustment aims to bolster government revenue amid growing fiscal challenges. To cushion the impact on low-income households, the government has proposed an expansion of the VAT zero-rated food list, adding essential items such as canned vegetables, dairy liquid blends, and specified organ meats. Social Grants and Income Tax Remain Unchanged Alongside the VAT hike, the budget includes moderate increases in social grants. Old age and disability grants will rise to ZAR 2,315 (US$126) from ZAR 2,185 (US$119), while child support grants will increase to ZAR 560 (US$30) from ZAR 530 (US$28). However, individual income tax brackets, rebates, and medical tax credits will remain unchanged for the upcoming fiscal year. Transfer duty rates on property transactions not subject to VAT will also be adjusted, with changes taking effect on April 1, 2025. Parliamentary Debate Could Delay Implementation The proposed VAT increase has not been without controversy. The budget, tabled by Finance Minister Enoch Godongwana on March 12, 2025, has faced resistance from major political parties. While the initial proposal suggested a 2-percentage-point increase, it was revised to a more gradual 1-point hike over two years in response to political pushback. Despite the adjustments, there is no certainty that the budget will pass before the fiscal year ends on March 31, marking an unprecedented delay in South Africa’s post-apartheid era. The ruling African National Congress (ANC) will need to secure support from at least one major opposition party to ensure its approval. What Happens if the Budget Fails? If the budget is not passed by April 1, the government is legally permitted to continue operating on up to 45% of the previous year’s budget until parliamentary approval is secured. However, new allocations, including those linked to tax reforms, cannot be implemented without formal approval. Despite the parliamentary deadlock, the National Treasury has confirmed that the VAT increase can take effect from May 1, 2025, even if the budget is not yet passed. The tax rate change, once implemented, would remain valid for up to 12 months unless lawmakers overturn the decision through legislative amendments. Next Steps for Lawmakers Parliament will review the budget in three key stages: approving the fiscal framework and revenue proposals, passing the division of revenue bill to allocate funds among government tiers, and finally voting on the appropriation bill to assign funding to specific programs. Lawmakers have until April 3 to approve the fiscal framework, but delays could extend the process. While amendments to the budget are possible, any changes must align with the overall revenue and expenditure limits set out in the proposal. The ANC, which lost its parliamentary majority for the first time in South Africa’s democratic history, faces a tough negotiation process. Secretary-General Fikile Mbalula has expressed willingness to engage with opposition parties to secure a deal. Meanwhile, Minister Godongwana has indicated openness to alternative proposals but has warned of the difficult trade-offs required. Economic and Policy Implications The VAT increase, coupled with other tax adjustments, is expected to play a crucial role in stabilizing South Africa’s fiscal position. However, the political uncertainty surrounding budget approval adds a layer of unpredictability to the implementation process. As the debate unfolds, taxpayers, businesses, and investors will closely monitor the developments, given the broader economic implications of the proposed tax hikes and fiscal policies.

SOUTHERN AFRICA

South Africa Set to Raise VAT Rate Amid Budget Uncertainty

March 20, 2025March 20, 2025 - by admin - Leave a Comment

The South African government has announced a planned increase in the Value-Added Tax (VAT) rate as part of its fiscal policy adjustments for the 2025-26 tax year. The proposal, outlined …

SOUTHERN AFRICA

Budget Delays in South Africa Over VAT Hike

February 19, 2025February 19, 2025 - by Jeremiah Amosu - Leave a Comment

South Africa’s national budget presentation was postponed on Wednesday due to a dispute between the country’s two largest ruling coalition parties over a proposed increase in Value-Added Tax (VAT). The …

WESTERN AFRICA

Court Challenge Over VAT on Restaurant Food in Nigeria

February 14, 2025February 14, 2025 - by Jeremiah Amosu - Leave a Comment

A legal battle has commenced over the application of Value Added Tax (VAT) on food sold in restaurants and hotels across Nigeria. Senior Advocate of Nigeria (SAN), Chief R.O. Balogun, …

WESTERN AFRICA

Nigeria Aims to Ease Inflation by Exempting Essentials from VAT

February 3, 2025February 3, 2025 - by admin - Leave a Comment

Nigeria is implementing significant tax reforms aimed at reducing inflation and stimulating economic growth. A key component of these reforms is the proposed increase in the Value-Added Tax (VAT) rate …

EASTERN AFRICA

VAT on Auction Sales for Debt Recovery Now Mandatory in Kenya

February 3, 2025February 3, 2025 - by Jeremiah Amosu - Leave a Comment

VAT on Auction Sales for Debt Recovery Now Mandatory in Kenya. In a pivotal decision, Kenya’s Tax Appeals Tribunal (TAT) has ruled that auction sales conducted for debt recovery purposes …

Mauritius to Impose 15% VAT on Foreign Digital Service Providers from 2026

WESTERN AFRICA

Nigeria’s VAT Collections Hit Record High of ₦6.72 Trillion in 2024

January 31, 2025January 31, 2025 - by admin - Leave a Comment

Nigeria has witnessed an unprecedented spike in its Value Added Tax (VAT) revenue, reaching a record-breaking ₦6.72 trillion in 2024—an 84.6% increase from ₦3.64 trillion in 2023. This surge highlights …

SOUTHERN AFRICA

A Call to Waive VAT from Chicken in South Africa

February 17, 2023December 28, 2024 - by Jeremiah Amosu - Leave a Comment

The issue of waiving Value Added Tax VAT from chicken in South Africa has made it to the limelight with advocacies from concerned stakeholders and taxpayers. At the forefront of …

Ghana E-VAT: Government Projects Whooping GH¢750 million from Tax

WESTERN AFRICA

Ghana VAT: GRA Urges Business Proprietors To Issue VAT Invoices To Customers

September 21, 2022December 27, 2024 - by admin - Leave a Comment

A new VAT order in Ghana emerges The Ghana Revenue Authority (GRA) has urged registered businesses to strive to issue the Commissioners Value Added (VAT) Invoice to their customers, and …