SMME CONNECT #11 – May 2025 EDITION | South African Revenue Service

Issue 11 – May 2025

This is yet another edition of SMME Connect to keep you informed of tax topics and SARS initiatives relevant to you. The information in this newsletter will help you meet your tax obligation easily.

SARS is committed to support small businesses across the nation. We appreciate the vital role that entrepreneurs play to drive economic growth and innovation.

By the end of SARS financial year 2024/25, SMMEs generated R527 billion in tax revenue, exceeding estimates by 1.64% and achieving a 9.24% increase year-on-year. The main contributions were PAYE (R211.3 billion or 40.02%), VAT (153.7 billion or 29.13%), and CIT (R114.9 billion or 21.79%). Medium-sized businesses accounted for 61.23%, small businesses for 31.53%, and micro businesses for 6.08%.

In November 2024, Entrepreneurship Month events offered resources to start-up and established entrepreneurs. Entrepreneurship Month was commemorated with a range of workshops, networking opportunities, and expert panels to help SMMEs thrive.

SARS is raising awareness of its offering to SMMEs. From March 17–18 2025, we were present at the ProudlySA Summit and Expo to reach out to entrepreneurs and offer help. On 10 May 2025, SARS participated in the Tender Success Summit: Tax and Contract Edition to help SMMEs and promote our digital channels. Ms Tshidi Molala, SARS Segment Lead, accompanied by her team offered a comprehensive resource for SMMEs.

SARS Tax Base Broadening and Education stand at the ProudlySA Summit and Expo.

No VAT Increase: What It Means for You
Employer Annual Declaration (EMP501) Deadline is 31 May 2025
What’s New at SARS?
File Accurately and on Time
NB: Record-Keeping
Educational Programmes for SMMEs

No VAT Increase: What It Means for You

Edward Kieswetter, SARS Commissioner, has noted the Finance Minister’s decision to reverse the planned 0.5% VAT-rate increase. The increase was initially set to take effect on 1 May 2025. SARS’s systems respect the current VAT rate of 15%.

The Commissioner acknowledges that vendors and consumers have invested to prepare for an increase in VAT during a period of uncertainty from Parliament’s deliberations and public comments.

The following measures will apply to all VAT vendors with effect from 1 May 2025:

VAT vendors must keep reporting and charging VAT at 15%.
If a vendor cannot revert to the 15% rate, because of complex system changes, supplies and purchases must be reported and accounted for at the 15.5% rate. Vendors must revert to the 15% rate no later than 15 May 2025.
On VAT returns, VAT transactions charged at 15.5% must be reported in field 12 (for output tax) and field 18 (for input tax).
Adjustments due to refunds of the 0.5% rate must also be reported in fields 12 (to customers) and 18 (from suppliers).
SARS will consider VAT-return declarations during verifications or audits for the affected VAT periods.
Automatic calculations for VAT returns will continue to use the 15% rate for tax periods/months beginning 1 May 2025.

Commissioner Kieswetter said that he “understands the complexity and the confusion that has resulted from this process. SARS will do its best to provide further clarity to create certainty of obligation for all vendors”.

For more information visit Value-Added Tax.

Employer Annual Declaration (EMP501) Deadline is 31 May 2025

All outstanding monthly returns (EMP201) and annual reconciliations (EMP501) must be submitted not later than the deadline of 31 May 2025. Settle debt on time to avoid penalties and interest.

Please note:

The EMP501 declaration period is from 1 April to 31 May 2025.
Submit the EMP501 with accurate EMP201 values (PAYE, SDL, UIF, and payments) and the value of tax certificates (IRP5/IT3[a]).
Exclude penalties and interest.

What’s New at SARS?

SARS has launched e@syFile™ Employer Version 8.0. The platform was redesigned for a better filing experience. Importantly, Version 8.0 has replaced all previous versions of the software from 1 March 2025.

Download e@syFile™ Employer Version 8.0 here: e@syFile download page.

Version 8.0 offers:

A refreshed and user-friendly interface for easier navigation.
Better system performance for faster processing.
Stronger security features to protect employer data.

The minimum system requirements are:

Windows 10 (64 bit).
8 GB RAM.
2 GB hard drive space (for downloading and installation to C:/drive; additional space will be required as employer data increases).

SARS recommends that employers upgrade to these system requirements to enjoy the benefits of e@syFile Employer 8.0.

Notes on e@syFile Employer 8.0:

Employers with 50 employees or fewer can still use eFiling to submit.
Reconciliation information submitted on the previous e@syFile Employer must be imported to Version 8.0. This will allow employers to make amendments if required.
First-time login will require a user to add recovery details. This information will enable users to recover the admin-password to enable access to Version 8.0 if they have forgotten it. This password is only for the user to log in to the application, and does not relate to any employer information to be reconciled.

See the latest FAQs on e@syFile™

File Accurately and on Time
Accurate employer reconciliation helps SARS issue IRP5 and IT3 certificates. It also enables Auto Assessment and lets SARS pre-populate Income Tax Returns (ITR12). Giving employees their IRP5 and IT3 certificates on time is crucial for them to file their ITR12s during tax season. Incomplete or late EMP501 submissions will incur a 1% penalty of the year’s PAYE liability, increasing monthly up to 10%. Correct any rejected EMP501 submissions to avoid penalties.

NB: Record-Keeping

Keep employee records for at least five years from the date that the tax return is submitted.

On SARS’s Businesses & Employers webpage, consult:

On SARS’s YouTube channel (@sarstax), watch: “How to submit an Employer Annual PAYE Reconciliation EMP501”

For more information and support for eFiling and e@syFile, send an e-mail to [email protected].

Educational Programmes for SMMEs

SARS has implemented a series of educational initiatives to improve tax knowledge among SMMEs

For more informative videos, go to: SARS TV

Webinars and Workshops

SARS’s specialists host interactive workshops and webinars on topics of interest to SMMEs, from basic tax compliance to advanced tax planning. Watch out for educational sessions by checking the How do I learn about taxes webpage or catch up on previous webinars on SARS TV.

Taxpayer Education Campaigns

Keep an eye on SARS’s social-media pages (LinkedIn, Facebook, and X) for our latest educational campaigns, which are also promoted on radio and television.

Are you interested in an educational workshop by SARS? Get in touch!

You can ask us to organise a workshop for you by emailing [email protected].

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