Quick Answer VAT vs Turnover Tax: What's the Difference? VAT is a 15% consumption tax you charge customers and hand to SARS – compulsory above R2.3 million in taxable sales. Turnover tax is an optional simplified income tax for micro businesses (turnover up to R2.3 million) at 0% to 3% of turnover. One taxes your sales to others; the other taxes your business. What this means in plain language They confuse people because both now share the R2.3 million number. The VAT threshold decides when you must register for VAT. The turnover tax ceiling decides whether you may elect the simplified system. A business can be inside one, both or…