The National Treasury projected a budget of R1.863 trillion for the previous year. For the 2025/26 financial year, the projected revenue increased to R2.006 trillion. This represents an increase of R143 billion, or approximately 7.7%, from the previous year’s budget.
The key revenue drivers are expected to include Value-Added Tax (VAT), with a planned rate increase from 15% to 15.5% in 2025/26 and a further rise to 16% in 2026/27. Personal Income Tax (PIT) is expected to generate stable revenue without any adjustments to tax brackets or rebates. Corporate Income Tax (CIT) is forecasted to remain steady despite economic pressures that had previously caused declines.
Excise duties, including alcohol, tobacco, and fuel levies, are expected to supplement the revenue without significant hikes.
In terms of actual revenue collections in the previous year, the Treasury fell short of projections by approximately R16.7 billion. The lower-than-expected revenue can be attributed to underperfomance in key areas, including VAT, corporate tax, and limited growth in personal income tax collections.
Corporate Income Tax (CIT) rate remains unchanged.
Considering the new and persistent funding pressures in health, education, transport and security, the government considered various policy options to raise the required additional funding. Such policy options that were considered included, amongst others, the possible increase in the corporate income tax rate.
The Johannesburg Central Business District, commonly called Johannesburg CBD, is one of the main business centres of South Africa and often referred to as the “capital city of money”. The state and condition of Johannesburg CBD’ s physical infrastructure have been deteriorating over the past decades.
The infrastructure deterioration has left the Johannesburg CBD with abandoned and hijacked high-rise buildings which serve as breeding grounds for criminals and criminality. Recently, the president of the Republic of South Africa, Mr. Cyril Ramaphosa, visited Johannesburg CBD as part of his oversight. What he discovered left him expressing his concern over the poor state of the Johannesburg CBD.
Strengthening Tax Compliance and Reforming South Africa’s Fiscal System: Key Updates for 2025.
In the 2025/26 fiscal year, the South African Revenue Service (SARS) has identified a critical gap in tax compliance. Despite substantial economic activity, a significant number of taxpayers remain unregistered or fail to file their returns. SARS has
detected 156 000 individuals in this category, highlighting the need for greater tax compliance across the country. In response, the Minister of Finance has called on all South Africans to support SARS in its effort to collect the necessary revenues,
which are essential for funding critical government services.
The rising cost of living: How the vat hike impacts South Africans.
Following the annual budget speech on the 12th of March 2025, the government has proposed a 0.5% increase in value-added tax (VAT), effective from the 1st of May 2025. This VAT hike has sparked wide-spread concern, particularly regarding its far-reaching effects on South Africans at every level of the supply chain.
The increase in Excise Duties, generally referred to as “Sin & Luxury taxes”, from 4.75% to 6.75% will see Alcohol, Tobacco, Cosmetics, and Electronics industries taking a higher knock than other product industries. This is caused by the fact that VAT is applied to excise duties as well. In summary, there is a VAT component on the excise duty, meaning that excise duty is regarded as a vatable expense of the product.
Will the increases curb consumer behaviours on alcohol and tobacco products?
