South Africa: Increases in VAT registration thresholds, carbon taxes
Increase in VAT registration thresholds effective April 1, 2026
The Minister of Finance on February 25, 2026, announced that, for the first time since 2009, the value added tax (VAT) registration thresholds will increase, effective April 1, 2026. The compulsory registration threshold will increase from R1 million to R2.3 million and the voluntary registration threshold will increase from R50,000 to R120,000.
Read a February 2026 report prepared by the KPMG member firm in South Africa
In addition, the following increases in carbon taxes were announced:
- The carbon tax rate was increased with 30.51% from R236 to R308 per tonne of CO2e effective January 1, 2026.
- The carbon fuel levy will increase to 19 cents per litre for petrol and 23 cents per litre for diesel effective April 1, 2026.
- The carbon tax cost recovery quantum for the liquid fuels sector will also increase from 0.99c/litre to 1.29c/litre, effective 1 January 2026.
A proposal to change the carbon tax threshold for commercial/ institutional activities (IPCC 1A4a) from a capacity-based threshold to a 25,000 tonnes of CO₂e emissions threshold effective January 1, 2026, has also been announced, along with various proposed amendments relating to the administration of carbon tax refunds.
Read a February 2026 report prepared by the KPMG member firm in South Africa