We at MI8 Security are committed to providing you with the highest level of security services and keeping you informed about changes that may affect our operations and, consequently, you. We want to address the recent announcement regarding the increase in the Value Added Tax (VAT) rate in South Africa.
As you may be aware, the Minister of Finance announced in the 2025 Budget Speech that the standard VAT rate will increase from the current 15% to 15.5% effective from 1 May 2025. Furthermore, a second increase to 16% is expected on 1 April 2026, although this is subject to the passing of further legislation. This marks the first change in South Africa’s VAT rate since the increase from 14% to 15% in April 2018.
What does this mean for you, our valued client?
The VAT increase will have a direct impact on the total cost of the security services we provide. From 1 May 2025, all invoices issued for services rendered on or after this date will reflect the new VAT rate of 15.5%. Similarly, from 1 April 2026, the VAT rate will again increase to 16%.
Key Dates to Remember:
- 1 May 2025: VAT increases from 15% to 15.5%.
- 1 April 2026 (Expected): VAT increases from 15.5% to 16%.
How will this be implemented by MI8 Security?
- Invoicing: All invoices for services provided on or after 1 May 2025 will be calculated with the new VAT rate of 15.5%. For services that span across the implementation date, we will adhere to the guidelines provided by the South African Revenue Service (SARS) to ensure accurate VAT calculation. This might involve a split in the VAT rate applied if the invoicing or payment terms dictate.
- Example: If we invoice you on 30 April 2025 for services to be rendered in May 2025, the 15% VAT rate will apply. However, if the invoice is issued on or after 1 May 2025, the 15.5% rate will be applicable.
- Long-term Contracts: For clients with existing long-term contracts, we will be reviewing the terms and conditions to ensure compliance with the new VAT regulations. We will communicate any necessary adjustments transparently and proactively.
- Quotes and Proposals: All new quotes and proposals issued from 1 May 2025 onwards will reflect the 15.5% VAT rate. We encourage you to review any existing quotes received before this date, as the final invoice might be subject to the new rate if the service is rendered after 1 May 2025.
Understanding the Reason for the Increase:
The government has indicated that these VAT increases are necessary to raise revenue to address various spending pressures in critical sectors such as health, education, transport, and security. While we understand that any tax increase can have an impact on consumers and businesses, we also recognize the importance of these public services.
MI8 Security’s Commitment:
We remain committed to providing you with cost-effective and reliable security solutions without compromising on the quality of our services. We will ensure a smooth transition to the new VAT rate and are here to answer any questions you may have regarding these changes and their impact on your account.
We value your continued trust in MI8 Security and assure you that we will always strive to provide you with the best possible service. Please do not hesitate to contact us should you require any clarification.