Budget 2026: Can the revenue boost bring some tax relief for households?

Finance Minister Enoch Godongwana is set to deliver the 2026 Budget Speech amid improved revenue collections and mounting pressure for tax relief. South Africans may be spared major new tax shocks in this week’s Budget Speech, with stronger-than-expected revenue collections giving Treasury slightly more breathing room than previously feared. However, competing demands from the health, property and clean energy sectors are intensifying as Finance Minister Enoch Godongwana prepares to table the 2026 Budget.

Economist Dawie Roodt said the Budget is likely to be “a little bit less bad” than anticipated, largely due to what he described as an overrun in state revenue collections driven by high commodity prices and improved tax compliance. “Collections are doing better than expected, largely because of high commodity prices like gold and platinum,” Roodt said. “Those sectors are paying more tax, which is helping quite a bit.” He also credited the South African Revenue Service with stronger enforcement and compliance measures, saying the agency appears to be limiting leakages and improving overall revenue performance.

As a result, he said revenue numbers remain buoyant and more sustainable than previously projected, even though the fiscal deficit is still expected to be sizeable. “The deficit still looks quite large, but it does seem to be moving in the right direction,” he said. For households, the key question is whether Treasury will introduce new personal income tax hikes.

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Roodt said he believes that is unlikely. “There will be increases in taxes on things like alcohol and cigarettes,” he said. “But a major tax increase — especially on personal income tax — is very, very unlikely.” He added that there may be limited relief through adjustments to personal income tax brackets, given what he described as slightly improved fiscal space.

While conditions remain tight, they are “a little bit less severe than we thought previously,” he said. Corporate income tax revenue is also expected to remain relatively firm, supported by commodity prices and stronger compliance, according to Roodt. However, he cautioned that improved revenue performance does not resolve South Africa’s structural economic challenges. “The bigger issue remains the lack of economic growth, and that is likely to persist,” he said.

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