Cash-strapped households, struggling small businesses and vulnerable pensioners are major beneficiaries of Finance Minister Enoch Godongwana’s Budget outlining a package of tax adjustments, grant increases and targeted spending measures aimed at cushioning citizens from persistent economic strain. The 2025/26 Budget, which was delivered in Parliament on Wednesday, also adjusted income tax brackets – providing breathing space to workers. Small businesses also stand to benefit as Godongwana in his Budget raised the compulsory VAT registration threshold from R1 million to R2.3 million, a change aimed at reducing compliance burdens and improving cash flow for emerging enterprises battling rising operating costs.
We are taking other measures to support small businesses: We are raising the capital gains tax exemption for the sale of a small business for older persons from R1.8 million to R2.7 million. “This applies to small businesses worth R15 million instead of the R10 million previously. It will enable small business owners to receive more tax relief when they sell their businesses,” Godongwana said.
Godongwana said additional tax relief for small business owners nearing retirement through higher capital gains exemptions, is intended to encourage entrepreneurship and smooth ownership transitions. For pensioners and other grant recipients, the Budget delivered increases to social assistance payments. The old age, disability and care dependency grants will rise by R80 to R2 400 from April, while the war veterans grant will increase to R2 420.
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Child support grants will see a smaller R20 adjustment. The increases come at a time when social grants remain a lifeline for millions amid high unemployment and rising living costs. Redistributive spending, Godongwana said, continues to be central to the government’s fiscal priorities, with the social wage still accounting for the majority of non-interest expenditure.
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