In Budget 2022, the Minister for Finance announced that the GST rate will be increased from:
- 7% to 8% with effect from 1 Jan 2023; and
- 8% to 9% with effect from 1 Jan 2024.
The factors determining which GST rate is to be applied in your invoicing are:
- when payment is received from your customer
- when goods are delivered/ services are performed for your customer.
Where you are required to charge GST at 8% on the supply on/after 1 Jan 2023, you must account for GST at 8% in your GST return. This is regardless of whether you have collected the GST payment from your customers.
The failure to account for GST on your supplies at the correct rate may attract penalties. Being prepared for GST rate change will help you avoid such increases to your business and compliance costs.