Cape town: South Africans will have to wait until the 2026 Budget to find out whether the proposed R20 billion in additional tax increases can be withdrawn. Presenting the Medium-Term Budget Policy Statement (MTBPS) at a sitting of the National Assembly at the Good Hope Chamber in Parliament, Minister of Finance Enoch Godongwana announced that a final decision will be revealed in the 2026 Budget.
According to South African Government News Agency, an additional R4 billion was allocated to the South African Revenue Services (SARS) as indicated in the 2025 Budget. This allocation was designed to strengthen debt collection, aiming to increase the revenue collected by between R20 and R50 billion per year. The Minister stated that the government’s decision will be based on SARS’s revenue performance for the remainder of the year.
The Minister noted that the better-than-estimated tax revenue, amounting to R19.7 billion, resulted from stronger household expenditure, which has boosted value-added tax collections, along with improvements in corporate tax receipts and dividend tax. Lower than expected VAT refunds also contributed to the improved revenue outlook, allowing the government to bring forward some once-off expenditure.
For the current year, an additional expenditure of R15.8 billion is proposed. The Minister highlighted adjustments in revenue that enable changes to spending estimates, including R2 billion for rebuilding Parliament and R1 billion for the Independent Electoral Commission for the 2026 municipal elections. Additional allocations are provided for the National Dialogue, as well as provisions for Education and Health announced in the May Budget.
In addressing the illicit economy, SARS reported that the government has lost around R40 billion in excise revenue to the cigarette black market since 2020. The Minister emphasized the government’s efforts to clamp down on illegal trade in illicit alcohol and fuel. He noted that SARS recently suspended three licenses for non-compliant tobacco production and called for customs officials to prevent criminals from evading taxes and introducing dangerous products into the market.
The Financial Intelligence Centre has been instrumental in providing intelligence reports to assist SARS in investigating criminal syndicates, identifying illicit markets in tobacco, precious metals, fuel, and procurement fraud. The Minister urged continued vigilance to safeguard the economy and consumer safety.