Cape Town, South Africa — The government’s decision on whether to implement proposed tax increases amounting to approximately R20 billion will be deferred until the 2026 Budget, Finance Minister Enoch Godongwana announced during the presentation of the Medium-Term Budget Policy Statement (MTBPS) in Parliament.
Godongwana explained that stronger-than-anticipated revenue performance by the South African Revenue Service (SARS) allows for the possibility that the additional tax increases may be withdrawn. He noted that SARS’s improved collections — including higher value-added tax and corporate tax receipts — have so far added R19.7 billion to the revenue outlook.
The additional R20 billion figure had been flagged earlier as part of efforts to strengthen debt collection, following an allocation of R4 billion to SARS in the 2025 Budget to support enforcement and revenue-gathering. The assessment of SARS’s performance over the remainder of the year will determine whether the tax increase proposal proceeds or is withdrawn.
Among other fiscal adjustments outlined, the government has proposed additional expenditure of R15.8 billion in the current year. Notable items include R2 billion for the rebuilding of Parliament and R1 billion for the Independent Electoral Commission ahead of the 2026 municipal elections.
Godongwana also drew attention to the continuing challenge presented by the illicit economy, with revenue losses of around R40 billion since 2020 in excise tax related to the cigarette black market. He emphasised strengthened collaboration between SARS and the Financial Intelligence Centre to combat non-compliant tobacco production and other illicit trade in fuel and precious metals.
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