Finance Minister Enoch Godongwana tabled the 2026 budget in parliament on 25 February. While parties within the Government of National Unity praised the allocation of funding, opposition parties pointed to problems
The Minister announced a budget of R2.67 trillion for the financial year, up from R2.58 trillion that was allocated in the previous financial year.
Godongwana projected South Africa will achieve real economic growth of 1.6% in 2026, an improvement from the 1.4 estimated in 2025.
Due to an improved outlook driven by higher-than-expected net VAT, corporate income tax and dividends tax collections, the government has decided to withdraw the R20 billion in tax increases provisionally included in the May 2025 budget.
“The improving fiscal position allows us enough room to withdraw the proposed tax increases, without putting fiscal sustainability or economic activity at risk,” he said.
The Minister added, however, that although South Africa is in an improved economic position, some taxes will be increased in line with inflation. These relate to alcohol, tobacco and fuel.
The tax on a 20-pack of cigarettes has been raised to R23.58 from R22.81. Tax on a 340 ml can of beer was increased by 8 cents, while tax on a 750 ml bottle of wine went up by 15 cents.
The general fuel levy was hiked by 9 cents per litre for petrol and 8 cents per litre for diesel.
The Minister further announced increases for social grants, increased spending on peace and security and investments in transport, water and energy.
A budget that gives hope – ANC
GNU parties praised the Treasury for the budget allocation. African National Congress (ANC) Treasurer General Gwen Ramokgopa said that the budget “this is a budget that gives hope.”
She said that the budget allocation reflected the announcements made by President Cyril Ramaphosa at the State of the Nation Address (SONA), and proves that there are “green shoots” of progress showing in South Africa’s economy.
The Democratic Alliance’s spokesperson on Finance, Mark Burke, said that the budget includes several DA policy positions and is proof of DA success in government.
“The DA welcomes no tax rises and no bracket creep for the first time in three years,” he said. Burke furthermore said the adjustment of the VAT registration threshold for small businesses from one million to two million Rand was positive.
“This budget displays a wholesale rethinking of tax policy by the National Treasury under a coalition government,” he said.
Burke added, however, that there are still areas for improvement, saying “we cannot be happy with 1.6% growth.”
“No budget is perfect, but this one is an improvement. It shows responsible macroeconomic policy,” he concluded.
2026 budget is proof no one listens to the President – Malema
On the other hand, opposition parties outside the GNU, ActionSA, the Economic Freedom Fighters (EFF) and the uMkhonto weSizwe party (MK) criticised the budget.
Leader of the EFF Julius Malema said that the positive twist on the budget this year was only forced because South Africa is in an election year.
He said that despite improved revenue collection at SARS, this does not amount to economic growth and ultimately does not remedy the unemployment crisis.
“We are worried that there is no plan on how the economy is going to be increased,” he said.
Additionally, he added that there was no mention during the speech of Ramaphosa’s plan to employ an additional 10,000 labour inspectors to crack down on illegal immigration.
There was no mention of funding being explicitly allocated to this. “They were clapping hands for it, but it is not budgeted for,” he said.
“Which means that what the President says doesn’t matter,” he said. However, Malema welcomed the adjustment to personal income tax.
‘1.6% growth not even enough to absorb 2025 matriculants’
Parliamentary leader of ActionSA, Athol Trollip, said that the budget was much improved from last year and said he was pleased to hear that the few tax increases were inflation-linked.
However, he said that there is not enough funding dedicated to fighting South Africa’s illicit economy. He said there should be money ringfenced for this purpose.
He added that the economy is still stagnant. “1.6% growth is not even enough to absorb the matriculants of 2025, nevermind the 7.8 million other unemployed,” he said.
The MK Party’s acting parliamentary leader, Des Van Rooyen, added that the projections informing the budget have been incorrect under the GNU.
“In 2024, they projected 1.4%. In 2025, he projected another 1.4%; now he’s projecting 1.6%, it is baffling as to what informs these projections,” he said. “Because they are always wrong.”
“We will never get a budget properly if our projections are ill-informed,” he said.
Build One South Africa leader Mmusi Maimane added that, while treasury is doing well, it is now up to the various departments to perform well with the funding they are given, and that this is not possible while corruption continues to plague government.
