Finance Minister Enoch Godongwana delivered South Africa’s 2026 national budget speech.
Image: Armand Hough / Independent Newspapers
THE government intends withdrawing the R20 billion in tax increases previously proposed in the May 2025 Budget, following a positive revision of tax revenue by R21.3 billion.
“The improving fiscal position allows us enough room to withdraw the proposed tax increases, without putting fiscal sustainability or economic activity at risk. We are also proposing additional tax measures to ease the financial burden on households and businesses, by adjusting personal income tax brackets and rebates fully in line with inflation,” said Finance Minister Enoch Godongwana.
Delivering the 2026 Budget speech on Wednesday, Godongwana reflected on the series of crises that had beset the nation over the last five years, asserting that the country had opted not to be defined by these challenges.
He confirmed South Africa’s removal from the "grey list" and the achievement of its first credit rating upgrade in 16 years, signaling growing confidence in the nation’s economic outlook.
However, the minister cautioned about the ongoing challenges such as the persistent logistic bottlenecks, weak public infrastructure and the recent outbreak of foot-and-mouth disease which poses a risk to future growth.
Godongwana told the nation that the spending priorities will come at a cost of R2.67 trillion.
“This spending includes a proposed R5 billion in the contingency reserve to cater for disasters declared since the MTBPS.”
While R86.9 billion has been allocated to support the provision of free basic services to 11.2 million households, Godongwana said the local government sphere, where many municipalities are in financial and operational distress, will be the focus of reforms.
“A central challenge with municipalities is that they not only differ in capacity, but also in their revenue-raising potential. This demands a more targeted approach to respond to the diverse pressures facing municipalities.”
In a statement, the ANC said the Budget balances responsibility with compassion, stability with transformation, and reform with protection of the most vulnerable.
“As we move deeper into an election year, the ANC does not ask South Africans to judge us on rhetoric. We ask them to judge us on measurable progress: stabilised debt, sustained social protection, increased infrastructure investment, improved revenue performance and strengthened security. The 2026 National Budget supports our priority programmes as outlined in the January 8th Statement; that South Africa’s challenges can be overcome through disciplined governance, strengthened state capacity and partnership in the public interest.”
DA spokesperson on finance Mark Burke said the Budget speech incorporated several DA policy positions and was evidence that the ANC no longer governs alone.
“The DA welcomes no tax rises and no bracket creep for the first time in three years. In fact, this budget displays a wholesale rethinking of tax policy by the National Treasury under a coalition government,’ Burke said.
He also said while the budget took several steps in the right direction, areas for improvement remained.
“Unemployment is unacceptably high while growth is unacceptably low. We cannot be happy with 1.6 percent GDP growth,” said Burke.
MK Party's acting parliamentary leader Des van Rooyen said the bedrock of any reliable budget was the projections, noting the modest 1.6% growth projection.
“They always get these projections wrong. This is more of an exercise of balancing the books rather than addressing the plight of our people. Our people want employment and you only realise employment out of a growing economy,” Van Rooyen said.
EFF leader Julius Malema said Godongwana tried to balance his speech, simply because it is an election year and he wanted to come across as reasonable, especially to the working class.
“The reality of the matter is that the economy is not growing and we know without the economy growing, we will not be able to provide jobs. We will not grow the infrastructure even if SARS collects more revenue, it does not mean economic growth,” he said.
GOOD Party secretary-general Brett Heron said another year has passed without the introduction of a Basic Income Grant other than the Social Relief of Distress grant, which is now merely being rebranded as a “livelihood grant.”
He said at R370 per month, the SRD did not lift a single recipient above the food poverty line.
Cape Times