With the May 2025 Budget it is clear that SARS needs to step up, and your clients need to be ready. With a record revenue target and hundreds of new hires focused on debt collection, Budget 2025/26 marks a serious ramp-up in enforcement. From AI-powered audits to crackdowns on the illicit economy, here’s what accountants need to know to stay ahead of the compliance curve.

VAT is going up in South Africa from 1 May 2025, and it affects more than just prices at the till. In this article, we break down what the VAT increase means for accountants and their clients, using simple examples like construction projects, retail pricing, property deals, and VAT returns. Whether you're advising small businesses or handling your own VAT submissions, this guide will help you apply the correct rate, avoid penalties, and stay one step ahead of the changes.

The 2025 Budget brings a mix of relief and challenges. Education gets a boost, with R332.3 billion allocated, but most of it goes to salaries. Social grants are increasing—old-age grants rise to R2,315, and child support grants to R560. However, consumers will feel the pinch as VAT increases by 0.5 percentage points in both 2025 and 2026. Sin taxes are also up, making alcohol and cigarettes more expensive. Healthcare sees major funding, while defence and security receive an extra R9.4 billion. The budget aims to balance economic growth with essential public services, but rising costs remain a concern.