Raise the VAT Threshold to R2 Million To Protect Small Businesses & Jobs

Small businesses are the engine of local jobs, community services, and everyday innovation. But many are being squeezed by rising costs and heavy compliance requirements.

Free SA is calling on national government to increase the VAT registration threshold to R2 million. This would reduce unnecessary red tape for smaller businesses, help informal and emerging enterprises grow, and keep more South Africans in work.

  • Closed: 25 February 2026
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In the media

Speak up, be heard, take a stand!

The compulsory VAT registration threshold was last raised in 2009, when it increased from R300,000 to R1 million — meaning it has not been updated in more than 15 years, despite major increases in the cost of living and the cost of doing business in South Africa.

Every signature strengthens a clear public message: make it easier to build and sustain small businesses in South Africa. Your support is quick, and your voice matters.

Sign this campaign to call on national government to raise the VAT threshold to R2 million.

By signing, you support a fairer system that helps small businesses grow, hire, and serve communities, without being buried in costly admin too early.

Success! The VAT threshold was increased to R2.3 million.

Thank you for making your voice heard.

More about this campaign

Key concerns with the current VAT threshold

The current threshold is too low for today’s economic reality, and it creates pressure that hits small and growing businesses hardest:

  • High compliance burden: VAT administration (invoicing, filing, record-keeping) can be expensive and time-consuming—especially for micro and small businesses without dedicated finance teams.
  • Growth penalty: Businesses nearing the threshold may avoid expanding (or split operations) just to dodge the extra compliance cost. That means slower growth and fewer jobs.
  • Cash-flow strain: VAT timing can hurt small businesses that have to pay VAT before they’ve actually been paid by customers.
  • Barrier to entry: New entrepreneurs and township businesses face added complexity when they should be focusing on getting stable and hiring.

What we're advocating for

We are calling on National Treasury and national government to:

  • Increase the VAT registration threshold to R2 million, aligned with inflation and the real cost of doing business today.
  • Reduce compliance pressure on small enterprises, allowing them to invest in stock, staff, and services instead of admin costs.
  • Support job creation and local economic growth by removing hurdles that disproportionately affect small and emerging businesses.
  • Commit to a transparent public process that meaningfully considers small business realities when tax administration rules are set.

How can you help

This campaign is about collective action. When enough of us speak, decision-makers have to listen.

  • Add your name to the public call to raise the VAT threshold to R2 million.
  • Share the campaign with business owners, entrepreneurs, workers, and community groups.
  • Encourage others to sign—every signature increases public pressure for practical reform.

Your signature is a simple step that helps protect jobs, support entrepreneurship, and strengthen communities.

Why this is necessary

The case for raising the threshold

South Africa needs policies that unlock growth, not policies that unintentionally block it. Raising the VAT threshold to R2 million is necessary because:

  1. The economy has changed, but the threshold hasn’t kept up.
    Costs like rent, fuel, electricity, and inputs have climbed. A threshold that made sense years ago can become outdated, pushing smaller firms into complex requirements too soon.
  2. Small businesses don’t have the same capacity as big companies.
    A large retailer can absorb compliance costs. A small bakery, salon, spaza supplier, mechanic, or start-up often can’t. Raising the threshold recognises the real difference between “small and growing” and “fully established.”
  3. It supports job creation where it’s needed most.
    Small and medium businesses are among the biggest potential job creators. Reducing compliance pressure helps them stabilise, expand, and hire—especially in local economies.
  4. It reduces incentives to stay small.
    When crossing the threshold feels like a penalty, businesses may delay expansion. A higher threshold encourages growth, formalisation, and sustainability.
  5. It’s a practical, achievable reform.
    This is not a vague promise—it’s a specific policy change that can be implemented and measured. It’s the kind of reform that helps real people quickly.

If you care about jobs, entrepreneurship, and a more workable economy, add your name today.

Sign now and help us send a clear message to national government: Raise the VAT threshold to R2 million. Let small businesses grow.

In the media

IOL Article
Daily Investor Article
BusinessTech Article
Moonstone Article

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