Current VAT rates in South Africa – know VAT-exempt items and Zero VAT categories
Value-added Tax or VAT is an essential component in the South African economy. It helps raise the revenue for the South African government. It is an indirect tax on goods and services.
The persons who are subject to paying VAT are known as Vendors. Vendors pay VAT on the net price of taxable items. As VAT is non-cumulative, it is applied during the manufacturing and supply of the products. If you are a business owner, you need to consider two parameters such as input tax and output tax while calculating VAT. If the input tax becomes more than the output tax, you can claim VAT refunds.
This article aims to provide an overview of VAT rates in South Africa and goods and services that are either VAT-exempt or zero-rated.
VAT rates in South Africa: from 1978 to present
In South Africa, two types of VAT systems are applied to taxable supplies. These are the standard rate and zero rate`. Unlike European nations, South Africa has no such reduced VAT rate.
Standard Rate
It is a primary rate of VAT. The South African government introduced it to make its tax regime efficient. It is implemented to generate revenue from country-wide consumption. It applies to most items except necessary ones.
| Year | Event | Rate |
| 1978 | Government introduced GST | 4% |
| 1991 | VAT replaced GST | 10% |
| 1993 | The rate increased by 40% | 14% |
| 2018 | Further increased by 7.14% | 15% |
| 2024 | The standard VAT rate currently | 15% |
Zero Rate
The government launched a zero-rate VAT to ease the financial burden on low-income groups. This Zero rate has helped enhance affordability and accessibility to necessary food items, agricultural products, clothing and books, etc.
List of Exempted Goods and Services in South Africa
VAT-exempt supplies are different from Zero-rated VAT items. Here, a vendor can not claim input tax on selling goods and services to the consumers. The products that fall under the exempt VAT system are:
- Life insurance and pension fund
- Interest and dividends
- Tuition and examination fees
- Student accommodation
- Resources for public libraries
- Local bus transport services
- Train and metro rail services
- Transportation for elderly and disabled people
- Long-term residential rent
- Private residential and commercial leases
A detailed list of Zero-rated VAT Items in South Africa
- Local services delivered to the non-residentials are Zero-rated.
- Municipality property rates charged by Municipalities
- Certain fuels such as petrol, diesel, and kerosene are Zero-rated.
- VAT levy on international transport fleets like sea and air freights is zero.
- The government has set up inbound duty and tax-free shops where you can buy zero-rated VAT items.
- Agricultural and pastoral products like animal feeds and urea are Zero-rated.
- Certain South African government grants and welfare schemes are Zero-rated.
- 19 basic foodstuffs such as rice, brown bread, maize meal, samp, dried beans, lentils, milk powder, fruits, vegetable oil, eggs, brown wheaten meal, etc are Zero-rated.
World VAT rates 2024: country by country
| Country | Standard VAT Rate |
| Vietnam | 8% |
| Venezuela | 16% |
| Vanuatu | 15% |
| Uzbekistan | 12% |
| Uruguay | 22% |
| United Kingdom | 20% |
| Uganda | 18% |
| Ukraine | 20% |
| Turkey | 20% |
| Tunisia | 18% |
| Thailand | 7% |
| Tajikistan | 14% |
| Tanzania | 18% |
| Taiwan | 5% |
| Sri Lanka | 18% |
| Russia | 20% |
| Saudi Arabia | 15% |
| Philippines | 12% |
| Panama | 7% |
| Egypt | 14% |
| El Salvador | 13% |
| Equatorial Guinea | 15% |
| Bahrain | 10% |
| Botswana | 14% |
| Chile | 19% |
| Cook Islands | 15% |
| Oman | 5% |
| Nigeria | 7.5% |
| Morocco | 20% |
| Mexico | 16% |
| Mauritius | 16% |
| Mauritania | 16% |
| Laos | 10% |
| Lebanon | 11% |
| South Korea | 10% |
| Kazakhstan | 12% |
| Israel | 17% |
| Isle of Man | 20% |
| Indonesia | 11% |
| Guatemala | 12% |
| Georgia | 18% |
| Ethiopia | 15% |
| Faroe Islands | 25% |
| United Arab Emirates | 5% |
| Ecuador | 15% |
| Algeria | 19% |
| Armenia | 20% |
| Azerbaijan | 18% |
| Bangladesh | 15% |
| Bulgaria | 20% |
| China | 13% |
| Costa Rica | 13% |
VAT registration and compliance
Businesses operating on South African soil are eligible to register to SARS for submitting VAT returns. An enterprise with an annual turnover of R1 million and VAT liability is subject to paying output tax. If a business’s annual turnover is expected to reach R 1 million within a year, it can also register to SARS as a VAT vendor. The following table shows some fixed timelines in which a business needs to submit its VAT returns to be tax-compliant.
| Eligibility | Duration |
| Businesses having a turnover of less than R1.5 million annually | Every 4 month |
| Businesses that belong to the agriculture and farming sector | Every 6 month |
| Businesses with an annual turnover of less than 30 million and more than 1.5 million | Every 2 month |
| Non-resident electronic goods and services providers | Every 12 month |
Other Indirect taxes
International Air Travel Tax
Passengers traveling to the BLNS countries (Botswana, Lesotho, Namibia, and Eswatini) pay a passenger tax of R100. Passengers departing to other countries except for BLNS need to pay a tax of R190 on the price of flight tickets.
Transfer Duty
Transfer duty is levied on transferring residential and commercial property ownership. If a person acquires a property, he or she must pay a transfer duty within 6 months.
| Property Value | Transfer Rate |
| Less than R1 million | 0% |
| 1,100,001 – 1,512,500 | 3% of property value |
| 1,512,501 – 2,117,500 | R12375 + 6% of property value |
| 2,117,501 – 2,722,500 | R48675 + 8% of property value |
| 2,722,501 – 12,100,00 | R97075 + 11% of property value |
| More than 12,100,001 million | R1,128,600 + 13% of property value |
Payroll taxes
Payroll tax is an indirect tax deducted from the employee’s paycheck and remitted to the SARS. This tax is also known as “Pay-as-you-earn (PAYE)”. This tax is paid to the government every month. The PAYE value depends on the salary paid to an employee. You can calculate your PAYE on your salary using our PAYE calculator.
Custom Duty
Customs and excise duty is charged on the goods imported into South Africa from other countries. This duty ranges from 0% to 60% and is imposed on imported goods. South African government has recently introduced a flat custom duty on electronic nicotine products.
Security Transfer Tax (STT)
Security transfer tax is charged on securities such as stocks, mutual funds, and derivatives. This tax is fixed at the rate of 0.25%. Companies distribute these securities to the stakeholders on a large scale. They can recover the tax amount from persons acquiring the stocks and shares.