The Rates and Monetary Amounts and Amendment of Revenue Laws Bill, 2025, was introduced in the National Assembly by the Minister of Finance on Thursday evening, 24 April 2025. The prior iteration of the Bill, proposing to codify the 0.5% VAT increase announced by the Minister to come into effect from 1 May 2025 in the 2025 Budget Speech, was never introduced in the National Assembly, and therefore is effectively replaced by the new Bill.
The new Bill proposes that with effect from 1 May 2025, "despite section 7(4) of the Value-Added Tax Act, 1991", and despite "the announcement by the Minister of Finance on 12 March 2025 in the national annual budget", the alteration of the standard VAT rate to 15.5% "does not come into effect".
The Bill accordingly indicates the intention to effectively withdraw the VAT rate increase such that the VAT rate should remain 15%.
The effect of the introduction of the Bill in the National Assembly is that the adoption of legislation to withdraw the VAT rate increase announced by the Minister earlier this year is on the Parliamentary agenda. While it is unlikely that the Bill will be promulgated and have the force of law on 1 May 2025 (i.e. by the date that the VAT rate increase was announced by the Minister to take effect), the Bill will presumably be enacted with retrospective effect.
Notably, the Bill is silent on expanding the list of zero-rated basic food items, and it is reasonably inferred that this amendment is no longer on the cards in the current legislative cycle.
Vendors can therefore cease any VAT rate system projects that may have commenced and consider whether any changes are required to be rolled back.
Other than VAT: The Bill maintains the amendments proposed in the 2025 Budget Speech in the form of adjustments to the transfer duty tables, the excise rates and limited provisions in the Income Tax Act and Employment Tax Incentive Act.
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