March Newsletter 2026 | Tax Updates, SARS Compliance & Business Insights
MARCH 2026 - THE BUDGET EDITION
Key Business Insights from the 2026 National Budget
The 2026 National Budget, presented by Finance Minister Enoch Godongwana, provides several important developments for businesses, investors, and taxpayers in South Africa. While the overall fiscal environment remains challenging, the budget introduces a number of measures aimed at supporting economic growth, encouraging investment, and easing certain tax burdens on individuals and small businesses.
Below are the key highlights business owners should take note of.
No Major New Tax Increases
One of the most significant announcements was that government withdrew the previously anticipated R20 billion in tax increases due to stronger-than-expected tax revenue collections. This decision provides some relief for both businesses and consumers, who have faced increasing financial pressure in recent years. Additionally, personal income tax brackets and rebates were adjusted in line with inflation.
Increased VAT Registration Threshold for Small Businesses
A major development for entrepreneurs is the increase in the compulsory VAT registration threshold from R1 million to R2.3 million. This welcomed change reduces the compliance burden for many small and growing businesses that previously had to register for VAT at lower turnover levels. Businesses below the new threshold can choose to remain unregistered for VAT, potentially simplifying administration and cash flow management.
Encouraging Investment and Savings
Government introduced measures aimed at improving South Africa’s savings rate and encouraging long-term investment:
The tax-free savings annual limit increases from R36 000 to R46 000.
The retirement fund deduction limit increases from R350 000 to R430 000.
These adjustments allow individuals and business owners to invest more tax-efficiently in long-term savings and retirement vehicles.
Infrastructure Investment to Support Economic Growth
The budget places strong emphasis on infrastructure as a driver of economic growth. Public-sector infrastructure spending is projected to exceed R1 trillion over the medium term, focusing on areas such as energy, transport, logistics and water systems.
Improving these sectors is expected to reduce logistical bottlenecks, improve electricity reliability and ultimately lower the cost of doing business in South Africa.
Moderate Increases in Excise and Fuel Levies
While large tax increases were avoided, certain indirect taxes were adjusted in line with inflation. These include:
Higher excise duties on alcohol and tobacco products
A modest increase in fuel levies
Although relatively small, these increases may still have indirect cost implications for businesses through higher transport and logistics expenses.
Economic Outlook
Government projects gradual economic improvement, with growth expected to reach approximately 1.6% in 2026 and improve further in the coming years. Fiscal reforms and structural changes aimed at improving electricity supply, logistics and investment conditions are expected to support this growth trajectory.
Final Thoughts for Businesses
Overall, the 2026 Budget takes a relatively cautious approach. While it does not introduce major new tax burdens, it highlights the continued need for fiscal discipline and economic reform.
For business owners, the increased VAT threshold, incentives for savings and investment, and infrastructure commitments present meaningful opportunities. However, ongoing economic challenges and modest growth projections mean that careful financial planning and tax compliance remain critical.
We can assist clients in reviewing their tax structures, investment strategies and compliance processes to ensure they are fully leveraging the opportunities presented in this year’s budget.
