If you think this isn’t another budget of doom, you are mistaken, very mistaken.
South Africa over the past 30 years has failed to grow its tax base. Instead of fixing that problem, the government continues to squeeze the same taxpayers harder each year, to the point of survival.
The ordinary taxpayer is paying more while receiving less in return. Less growth, less certainty and less confidence that the system is fair. Many of the things happening in this country no longer make sense, and the contradictions are becoming harder to ignore.
Reports show that an estimated R25 billion has been lost to cigarette VAT through illicit trade. Yet while illegal cigarette sales flourish, a tiny minority of people who smoke pipe tobacco and cigars are penalised with higher and higher excise increases, despite buying legally and paying every cent of VAT due. Those who comply carry the burden.
The Finance Minister Enoch Godongwana is scheduled to deliver the 2026 National Budget Speech on Wednesday, 25 February, and many taxpayers are bracing themselves. Not because they are hostile to tax, but because they are exhausted by a system that keeps demanding more.
The pressure is not always obvious. Instead of headline-grabbing tax hikes, the government increasingly relies on fiscal drag, keeping tax brackets unchanged while inflation pushes salaries into higher brackets. On paper you earn more. In reality you are poorer, yet taxed at a higher rate. In the 2025 budget alone, this mechanism extracted an estimated R16.7 billion from personal income taxpayers without a single rate being raised.
This is happening against the backdrop of a shrinking and dangerously concentrated tax base. Personal income tax now accounts for close to 40% of total tax revenue, with roughly 80 000 high-earning taxpayers contributing around 30% of all personal income tax collected. There may be more than 26 million registered taxpayers in South Africa, but only about 7 to 9 million earn enough to pay income tax at all. When that narrow group feels over-targeted, the consequences are predictable: emigration and reduced investment. Many deliberately don’t pay tax and hide their income in various ways.
High unemployment makes matters worse. With official unemployment hovering around 32%, millions of South Africans are unable to contribute to the tax system and instead rely on the state to survive.
Corporate tax has offered little relief either as this sector shrinks. While some sectors remain resilient, mining, historically a major contributor, suffered a sharp contraction in provisional tax collections during 2024 and 2025 due to rail failures, port inefficiencies and volatile commodity prices.
The VAT debate still hangs over this budget. Government’s aborted plan in 2025 to raise VAT to 16% was politically explosive and ultimately reversed only through political outrage, but it left behind a R75 billion hole in the fiscal framework. That hole has not been filled, and few believe it has been forgotten. Instead, the expectation is that it will be patched through fuel levy increases, bracket freezes and relentless excise hikes.
SARS, for its part, is under pressure to deliver. The modernisation drive, with AI-driven compliance systems and real-time reporting, is expected to intensify enforcement, particularly around VAT and digital services. Streaming platforms, software subscriptions and international online purchases are all firmly in the crosshairs. The VAT rate may not change, but the cost of living almost certainly will.
There is also a lingering question around an additional R20 billion in potential tax measures flagged by the Minister last year, should revenue collection fall short. Whether SARS has managed to close that gap remains unclear, but the uncertainty alone adds to the unease heading into this budget.
The Treasury’s growth projection of 1.5% for 2026 isn’t credible. As no or little growth continues, the revenue shortfall widens and the pressure on existing taxpayers intensifies.
Contradictions remain. Billions are lost through illicit trade, yet legal consumers are punished. Compliance is rewarded with higher taxes, while failure and inefficiency go largely unaddressed.
People are getting tired — tired and increasingly concerned — of paying more and more tax each and every year. If anyone believes this budget will ease that burden, they are very mistaken.
