2026 Budget Speech

VAT, Tax and Your Business

The 2026 Budget Speech delivered by Enoch Godongwana reinforces a clear fiscal strategy in South Africa: strengthen revenue collection, tighten compliance and stabilise public finances. For businesses and taxpayers, the focus is not on dramatic rate hikes but on enforcement, accountability and administrative reform.

Here is what matters most.

VAT

• VAT rate unchanged - The VAT rate remains at 15 percent. No increase was announced, providing stability in an already pressured economy.

• VAT registration thresholds increased - A significant development is the adjustment of VAT registration thresholds:

  The compulsory registration threshold increases from R1 million to R2.3 million in taxable turnover

• The voluntary registration threshold increases from R50 000 to R120 000

This move reduces the compliance burden on smaller and growing businesses and allows greater flexibility before mandatory VAT registration applies. However, businesses approaching the new threshold must carefully monitor turnover to avoid late registration penalties.

• Stronger VAT enforcement and refund scrutiny - Additional resources have been allocated to the South African Revenue Service to enhance audit capability, data analytics and debt recovery. Expect tighter verification processes, closer inspection of VAT refunds and faster intervention where discrepancies are identified.

Corporate and Business Tax

• Corporate income tax rate unchanged - No adjustment to the corporate income tax rate was announced. Government’s strategy centres on improved collection rather than higher rates.

• Broadening of the tax base - Increased focus on closing loopholes and limiting aggressive tax structures signals a more assertive compliance environment.

• Review of incentives - Sector based incentives remain under review to ensure measurable economic impact.

Personal Income Tax

• Limited bracket relief - Minimal adjustments mean bracket creep remains a reality for many individuals.

• Collection efficiency prioritised - Revenue growth will rely heavily on improved enforcement and compliance monitoring.

Debt Collection and SARS Authority

• Expanded enforcement capacity - SARS has been empowered with additional funding to intensify debt collection efforts.

• Data driven oversight - Greater integration between financial institutions and SARS significantly increases transparency. The margin for non disclosure continues to narrow.

  
  

What This Means for Business

The 2026 Budget does not rely on headline tax increases. Instead, it sharpens administration and enforcement.

The message is clear: compliance will be monitored more closely and tax debt will be pursued more decisively.

The environment is tightening. The advantage lies with those who act early and act correctly.

At TDM, we do not merely observe budget announcements. We interpret them, anticipate enforcement trends and position our clients ahead of regulatory pressure.

• Strategic VAT registration guidance under the new thresholds

• Proactive VAT and tax debt intervention

• Structured engagement and negotiation with SARS

• Compliance reviews aligned with current audit focus areas

• Risk mitigation before enforcement escalates

As SARS strengthens its systems and increases scrutiny, reactive approaches become costly. Early assessment, accurate disclosure and structured negotiation create leverage and control.

If you are approaching the new VAT threshold, managing VAT refunds, or facing outstanding tax exposure, now is the time to review your position.

Contact TDM for a confidential assessment of your VAT and tax risk.

Act early. Act correctly.