Unisa experts respond to Finance Minister's 2026 Budget speech

SOUTH Africa's 2026 Budget, delivered by Finance Minister Enoch Godongwana on Wednesday, marks a significant shift towards providing much-needed relief for households and small businesses grappling with high inflation and a sluggish economy.

- SIFISO MAHLANGU

Among the key measures announced are tax adjustments aimed at improving financial stability and supporting growth.One of the most notable changes is the increase in the VAT registration threshold, which has risen from R1 million to R2.3m. This move is expected to ease the compliance burden on small businesses, which often struggle with the financial and administrative challenges of VAT. With fewer businesses required to register for VAT, the move allows entrepreneurs to focus more on growth and job creation, particularly in a difficult economic environment.

Simphiwe Mili, Senior Tax Lecturer at Unisa, praised the adjustment, stating: "Increasing the VAT registration threshold provides small businesses with much-needed relief. It's a practical way to support entrepreneurship and reduce administrative costs, allowing businesses to focus on growth rather than bureaucratic hurdles."

Another important measure was the adjustment of personal income tax brackets and rebates in line with inflation, which will help mitigate the effects of bracket creep. Many South Africans have seen their wages pushed into higher tax brackets due to inflation, resulting in a higher effective tax rate without a meaningful increase in purchasing power. Mili believes this adjustment is essential for protecting disposable income.