Government wants a ‘credible and principle-led’ fiscal anchor

Government remains committed to a “principle-led” fiscal anchor to ensure sustainable public finances, with National Treasury describing the 2026 Budget as a “turning point” in public finances.

In order to give impetus to this turning point, Treasury and cabinet will undertake “detailed analytical work to prepare legislation to anchor sound fiscal principle in law”.

Full details of the fiscal anchor will be published in the Medium-Term Budget Policy Statement (MTBPS) later this year.

Read: SA public finances ’emerging from the fiscal wilderness’

Treasury Director-General Duncan Pieterse says the anchor will require each new administration to table a medium-term plan that is achievable. He indicated that Treasury’s preference is a credible, principle-based approach rather than numerical rules.

“If numerical targets are set and they are not met, it will erode the credibility of the fiscal anchor,” he said during a media briefing in parliament.

“Without sustainable public finances, debt-service costs will consume ever more of the economy’s available resources, eroding investment, productive capacity and living standards,” Treasury said in the 2026 Budget Review.

Revenue collections

Treasury notes that sustained investment, economic growth, and further improvements in tax administration will support higher revenue collection.

Gross tax revenue has been revised upwards by R21 billion from R1.98 trillion to just over R2 trillion, while main budget revenue is up by R29 billion.

Corporate profitability has improved due to the precious metal upswing, and dividends tax collections were boosted by large, once-off collections from the mining and retail sectors.

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The South African Revenue Service (Sars) has been allocated R7 billion over the medium term to recruit additional debt collectors and increase its compliance drive.

Although Sars has fallen short of its debt collection target, more than 600 collectors have been appointment, and the recruitment process is still continuing. Outstanding tax debt is sitting at around R646 billion, of which R518 billion is undisputed.

Sars has also registered 1.3 million new taxpayers, contributing to additional revenue of almost R5 billion.

“The tax authority also engaged with digital economy participants, particularly social influencers, to facilitate tax compliance in the emerging segment.”

No relief

Although taxpayers have received some relief from fuel levy increases in the recent past, this will not be the case this year. The general fuel levy, the Road Accident Fund (RAF) levy, as well as the carbon tax on fuel are  all set to increase.

The RAF levy will increase by 7 c/l to R2.25 per litre from 1 April.

The fuel levy on petrol will rise from R4 per litre to R4.10 this year, and on diesel from R3.85 to R3.93. The total cost of fuel taxes on petrol and diesel increases from R6.37 to R6.58 (petrol) and R6.24 to R6.45 (diesel).

Excise duties on alcoholic beverages will increase by 3.4% for the next financial year. Stakeholders in the liquor industry have called on Finance Minister Enoch Godongwana to pause any further increases until a review of the excise duty framework has been completed.

However, the latest rise is significantly lower than last year’s 6.75% increase.

The change:

The increases mean that consumers will now pay:

• 8c more for a 340ml can of malt beer, cider, or alcoholic fruit beverages;
• 15c more for a 750ml bottle of unfortified wine;
• 26c more for a 750ml bottle of fortified wine;
• 49c more per bottle of sparkling wine; and
• R3.20 more per 750ml bottle of spirits.

Taxes on tobacco products will also rise in line with inflation.

To do list 

The proposed gambling tax remains on the table.

National Treasury published a draft online gambling tax discussion paper for public comment in November 2025, proposing a 20% tax on gross gambling revenue generated by online gambling. After it received several requests, it extended the deadline for public comments to 27 February 2026.

Read: SA’s gambling problem getting worse
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Treasury plans to include a proposal in the draft legislation later this year once it is concluded consultations with stakeholders. It will also publish a response document on proposal relating to the taxation of collective investment schemes.

As part of the review of the urban development zone (UDZ) tax incentive, government will explore targeting the incentive to better support affordable housing developments in areas that are close to jobs, public transport and essential services.

A workshop will be held with relevant stakeholders during 2026, with the aim of tabling proposals in the 2027 Budget.

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