Cape Town – Finance Minister Enoch Godongwana has announced inflation-linked tax relief in the 2026 Budget after two years without adjustments, helping protect personal income taxpayers from bracket creep.
The relief aims to reduce household financial pressure while supporting savings and investment, as South Africa’s national savings rate remains below levels needed to build long-term wealth.
To encourage saving, the annual tax-free investment contribution limit will rise from R36 000 to R46 000.
At the same time, the government will increase certain “sin” taxes and fuel levies. Excise duties on tobacco and alcohol products will rise in line with inflation, including taxes on electronic nicotine devices.
The general fuel levy will increase by 9 cents per litre for petrol and 8 cents per litre for diesel.
Over the Medium-Term Expenditure Framework period, the National Treasury (South Africa) projects tax revenue to grow from about R2.13 trillion in 2026/27 to R2.38 trillion in 2028/29, with the tax-to-GDP ratio averaging 26.1%.
The budget seeks to balance revenue collection with measures that ease household and business financial burdens while maintaining fiscal sustainability.
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Compiled by Betha Madhomu
