The 2026 South African Budget Speech introduced a range of tax and allowance adjustments affecting individuals, small businesses, and companies. Below is a clear summary of the confirmed changes that are most relevant to taxpayers and business owners.
VAT and Business Registration Thresholds
To ease the administrative burden on smaller enterprises, the VAT registration thresholds have been significantly increased:
- The compulsory VAT registration threshold has risen from R1 million to R2.3 million.
- The voluntary VAT registration threshold has increased from R50,000 to R120,000.
These changes aim to reduce compliance pressure on smaller businesses and growing enterprises.
Capital Gains Tax (CGT) Adjustments
Several CGT relief measures were announced:
- The small business CGT exemption has increased to R2.7 million, applicable to businesses valued at up to R15 million.
- The annual CGT exclusion for individuals and special trusts increased from R40,000 to R50,000.
- The primary residence CGT exclusion increased from R2 million to R3 million.
- The CGT exclusion on death increased from R300,000 to R440,000.
Personal Income Tax and Rebates
- Personal income tax rates remain unchanged.
- Tax brackets have been adjusted for inflation to prevent bracket creep.
- Primary, secondary, and tertiary tax rebates have increased in line with inflation.
- Tax-free income thresholds were also increased in line with inflation.
Medical Aid Tax Credits
Medical aid tax credits were increased as follows:
- R376 for each of the first two dependants
- R254 for each additional dependant
Subsistence and Travel Allowances
- Subsistence allowance for meals and incidental costs increased to R595 per day.
- Allowance for incidental costs only increased to R184 per day.
- The reimbursive travel rate remains tax-free up to R4.95 per kilometre, regardless of vehicle value, provided no other vehicle allowance is received (excluding tolls and parking).
Corporate and Investment Taxation
- Corporate income tax remains unchanged at 27%.
- Dividends tax remains unchanged at 20%.
- The annual Donations Tax exemption increased from R100,000 to R150,000.
Tax-free Savings and Retirement Funding
- The annual tax-free investment limit increased from R36,000 to R46,000.
- The retirement fund deduction cap increased from R350,000 to R430,000.
Fuel Levies and Sin Taxes
Effective from 1 April 2026, fuel levies will increase:
- General fuel levy: +9c/litre (petrol) and +8c/litre (diesel)
- RAF levy: +7c/litre
- Carbon fuel levy: +5c/litre (petrol) and +6c/litre (diesel)
Excise duties on alcohol and tobacco were increased in line with inflation.
Offshore Investment Allowance
The Foreign Discretionary Allowance was doubled from R1 million to R2 million per year, enabling greater offshore investment and diversification opportunities.
LINK TO FULL BUDGET SPEECH – speech.pdf
LINK TO SARS 2026 TAX GUIDE – Budget 2026 Tax guide.pdf
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