ActionSA’s fight to secure additional funding for the South African Revenue Service (SARS) during last year’s Budget has now paid dividends for all South Africans. The Finance Minister’s announcement today that the R20 billion in planned tax increases has been scrapped confirms what ActionSA has argued all along: when SARS is properly resourced, higher taxes are unnecessary.
After receiving an additional R7 billion over the medium term, revenue collection for 2025/26 is now projected to be R28.8 billion higher than the 2025 Budget estimate. This improvement has eliminated the need for a VAT increase, personal income tax bracket creep, or excessive fuel levy hikes — a welcome relief for already overburdened households and businesses.
From day one, ActionSA has been the leading voice in Parliament demanding that SARS be rebuilt after years of deliberate underfunding, which created an estimated R800 billion tax gap. SARS’s improved performance is therefore not only a vindication of ActionSA’s position, but a victory for every South African who expects government to manage public finances efficiently before reaching into taxpayers’ pockets.
We welcome full inflationary adjustments to personal income tax brackets and medical tax credits after two years of no relief. The long-overdue increase in the VAT registration threshold for small businesses — from R1 million to R2.3 million, the first adjustment since 2009 — is another positive step that will ease compliance burdens for small businesses and support growth, investment, and job creation.
After ActionSA put the illicit economy firmly on the national agenda, we welcome the decision to limit excise duty (“sin tax”) increases to inflation. Excessive above-inflation hikes only widen the price gap between legal and illicit goods, strengthening criminal syndicates while punishing compliant businesses. However, announcements without funding and targets mean little. While the allocation of R990 million and the filling of 738 posts for the Border Management Authority (BMA) is a start, South Africa still lacks a ring-fenced, measurable plan to dismantle the illicit economy.
Although R12 billion in savings has been identified and reallocated over the medium term to areas such as the judiciary, border management, defence, and StatsSA, this represents less than 0.15% of the Budget and falls far short of what is needed. For example, the Budget allocates R4.5 billion to VIP protection for a bloated Cabinet, while only R2.7 billion goes to Directorate for Priority Crime Investigation. ActionSA has demonstrated that nearly R2 billion a year could be saved simply by cutting the bloated Cabinet.
While this Budget reflects marginal improvements, economic growth of just 1.4% remains deeply inadequate. With the global economy projected to grow at 3.3% and peer countries at 4–6%, South Africa cannot afford complacency. We need more urgent, bold and pragmatic reforms to kickstart growth and create jobs.
ActionSA’s presence in Parliament is making a tangible difference. As the unofficial opposition, we are proving that principled pressure and evidence-based solutions can deliver real outcomes. This Budget shows that when government is challenged to govern better, all South Africans win.
R20bn Tax Hikes Abandoned After ActionSA’s SARS Intervention
ActionSA’s fight to secure additional funding for the South African Revenue Service (SARS) during last year’s Budget has now paid dividends for all South Africans. The Finance Minister’s announcement today that the R20 billion in planned tax increases has been scrapped confirms what ActionSA has argued all along: when SARS is properly resourced, higher taxes are unnecessary.
After receiving an additional R7 billion over the medium term, revenue collection for 2025/26 is now projected to be R28.8 billion higher than the 2025 Budget estimate. This improvement has eliminated the need for a VAT increase, personal income tax bracket creep, or excessive fuel levy hikes — a welcome relief for already overburdened households and businesses.
From day one, ActionSA has been the leading voice in Parliament demanding that SARS be rebuilt after years of deliberate underfunding, which created an estimated R800 billion tax gap. SARS’s improved performance is therefore not only a vindication of ActionSA’s position, but a victory for every South African who expects government to manage public finances efficiently before reaching into taxpayers’ pockets.
We welcome full inflationary adjustments to personal income tax brackets and medical tax credits after two years of no relief. The long-overdue increase in the VAT registration threshold for small businesses — from R1 million to R2.3 million, the first adjustment since 2009 — is another positive step that will ease compliance burdens for small businesses and support growth, investment, and job creation.
After ActionSA put the illicit economy firmly on the national agenda, we welcome the decision to limit excise duty (“sin tax”) increases to inflation. Excessive above-inflation hikes only widen the price gap between legal and illicit goods, strengthening criminal syndicates while punishing compliant businesses. However, announcements without funding and targets mean little. While the allocation of R990 million and the filling of 738 posts for the Border Management Authority (BMA) is a start, South Africa still lacks a ring-fenced, measurable plan to dismantle the illicit economy.
Although R12 billion in savings has been identified and reallocated over the medium term to areas such as the judiciary, border management, defence, and StatsSA, this represents less than 0.15% of the Budget and falls far short of what is needed. For example, the Budget allocates R4.5 billion to VIP protection for a bloated Cabinet, while only R2.7 billion goes to Directorate for Priority Crime Investigation. ActionSA has demonstrated that nearly R2 billion a year could be saved simply by cutting the bloated Cabinet.
While this Budget reflects marginal improvements, economic growth of just 1.4% remains deeply inadequate. With the global economy projected to grow at 3.3% and peer countries at 4–6%, South Africa cannot afford complacency. We need more urgent, bold and pragmatic reforms to kickstart growth and create jobs.
ActionSA’s presence in Parliament is making a tangible difference. As the unofficial opposition, we are proving that principled pressure and evidence-based solutions can deliver real outcomes. This Budget shows that when government is challenged to govern better, all South Africans win.