South Africa's budget may be tweaked further as more talks between political parties will try to overcome differences over a contentious plan to raise value-added tax, the country's finance minister told Reuters.

South Africa's Finance Minister, Enoch Godongwana, has announced a 0.5% increase in Value Added Tax (VAT) for the current financial year, with an additional 0.5% hike planned for 2026. This measure aims to address urgent revenue needs amidst ongoing political negotiations within the Government of National Unity (GNU).

Take advantage of tax-free savings accounts, medical aid deductions, and retirement contributions to reduce taxable income

Finance Minster Enoch Godongwana Wednesday tabled his budget for the for the 2025/2026 financial year, a month after it was postponed following a fall-out with the ANC’s biggest coalition partner over value-added tax hikes.

Business leaders have warned that South Africa cannot get complacent thinking that the tabled budget on Wednesday (12 March) is a done deal, saying that it has not been passed, and great uncertainty lies ahead.

South Africa’s 2025 budget is a cautious step toward fiscal stability, with debt peaking at 76.2% of GDP in 2025-26 and a narrowing deficit. For employees, it offers short-term respite but lacks the ambition to transform lives.

South African Finance Minister Enoch Godongwana may have to make changes to the national budget after parties that control more than half the seats in parliament rejected his plans to raise taxes.

Explore how South Africa's proposed 16% VAT rate stacks up against global standards and what it means for consumers.

South Africa's finance minister unveiled Wednesday a budget with a smaller increase in value-added tax than previously proposed, but the move was still rejected by trade unions who say any rise in taxes that will have a negative impact on the country’s poorest is unacceptable.