VAT to rise to 16% in South Africa
Finance Minister Enoch Godongwana has announced that the value-added tax (VAT) will be increased to 16% by 2026/27 during the delayed 2025 Budget speech on Wednesday, 12 March 2025.
VAT will increase by 0.5 percentage points in May 2025 and by another 0.5 percentage points in April 2026, reaching 16% in the 2026/27 financial year.
The VAT hike is expected to raise R13.5 billion rand for 2025.
On the topic of tax, another concerning/scary fact is to see that the latest tax statistics show that 3.94% of taxpayers pay half of all income tax in South Africa.
Efficient Group Chief Economist Dawie Roodt warns this is bad news for a country that relies heavily on a very strained tax base – and if the government pushes taxpayers any further, it could collapse its collection efforts.
Big petrol and diesel cut for April
South African motorists benefits from a sizeable cut to petrol and diesel prices this week.
The price of Petrol came down by between 58 and 72 cents per litre, while the diesel cut was 84 cents per litre.
New inland fuel prices:
- Petrol 93 – R21,52 per litre
- Petrol 95 – R21,62 per litre
- Diesel – R19,32 per litre
Naamsa sales statistics for March 2025
Domestic new vehicle sales reached 49,493 units – an increase of 5,504 units, or 12.5%, compared to March 2024. The new passenger car sales was mostly responsible for this performance with an increase of 25.3% to 33,447 units, due to consumer demand and a friendly lending environment.
Sales in the medium and heavy truck segments of the industry reflected a weak performance in March 2025, with 696 medium commercial vehicles and 2,022 heavy trucks and buses sold. This represented a decline of 1.8%, compared to the 709 medium commercial vehicles sold in March 2024, and a decrease of 0.5%, from the 2,034 heavy trucks and buses sold in the corresponding month last year.
Surprisingly, export sales recorded an impressive increase of 31.1%, reaching 39,477 vehicles in March 2025, which is 15.7% higher than March 2023 exports. This marks the first export growth in ten months.
South Africa’s automobile export model continues to drive industrial expansion and job creation. The surge in overseas demand for locally manufactured vehicles reaffirms South Africa’s competitiveness in the global automotive market.
A few months ago I mentioned that the Motor Industry will see more changes in the next decade than the past nine decades, driven by economic shifts, technological advancements, and changing consumer trends.
Naamsa announced that the 2025 SA Auto Week [SAAW] will be hosted in the Eastern Cape from 01-03 October 2025 under the theme, – “Reimagining the Future “
Thanks once again to Naamsa for accurate and on time reporting, as well as Bussinestech and OL for valuable market insights.
– Cobus Lourens –
