Value-Added Tax Act 89 of 1991
The Value-Added Tax Act provides for the imposition and collection of value-added tax (VAT) in South Africa. Enacted in 1991, it replaced the General Sales Tax and introduced a comprehensive consumption tax. The Act defines taxable supplies, rates, exemptions, and the registration and compliance requirements for vendors.
Legal area: Law governing the assessment, collection, and administration of taxes.
Year enacted: 1991
Full text: https://www.gov.za/documents/south-africa-vat-act-89-of-1991
Key Provisions
- Section 7: Charge of VAT at 15% on taxable supplies
- Section 8: Zero-rated supplies including certain food items and fuel
- Section 11: Exempt supplies including financial services and educational services
- Section 16: Input tax credits for vendors
- Section 23: Registration requirements for vendors
- Section 34: Administrative provisions including assessments and penalties
Significance
VAT is a major source of government revenue in South Africa. The rate has been adjusted several times, most recently to 15% in 2018. The zero-rating of basic food items is an important social protection mechanism, though concerns about its effectiveness in reaching the poor persist.