Godongwana announces tax relief for indivduals, businesses

After two years with no inflationary relief, Finance Minister Enoch Godongwana has adjusted the personal income tax bracket and rebates to compensate individuals for the effect of inflation.

Godongwana says these additional tax measures are to ease the financial burden on households and businesses.

Tabling the Budget Speech in Cape Town on Wednesday, Godongwana conveyed to Parliament that the national savings and investment rate is far below the levels needed to induce generational wealth.

“To encourage South Africans to save more, we propose that the tax-free annual investment limit be increased from R36 000 to R46 000 per year,” says Godongwana.

Over the Medium-Term Expenditure Framework (MTEF) period, Treasury estimates that tax revenues will rise from R2.13 trillion in 2026/27 to R2.38 trillion in 2028/29, and the tax-to-GDP ratio will average 26.1 percent.

He also informed the National Assembly that higher adjustments on certain taxes remain unavoidable.

“For 2026/27, excise duties on tobacco will be increased in line with inflation,” he said, adding that this will include excise duty on electronic nicotine and non-nicotine delivery system

Excise duties on alcoholic beverages increase in line with inflation

He said the combined increase in fuel levies is also in line with expected inflation, saying “the general fuel levy will go up by 9 cents per litre for petrol and 8 cents per litre for diesel.”