Budget Summary 2026/2027
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Posted by: Ernest Roper
 On 25 February 2026, Honourable Minister of Finance, Enoch Godongwana,
delivered the much anticipated annual Budget Speech for the 2026/2027 fiscal year. The budget marks a pivotal moment for South Africa’s public finances. After years of rising debt, the fiscal trajectory shows a decline in debt and a narrowing budget
deficit, which signals stronger fiscal stability and renewed investor confidence.
Key Budget Highlights:
Personal Income Tax: Individuals
Individual tax brackets for the tax year 1 March 2026 to 28 February 2027 will be adjusted in line with inflation:
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Taxable income (R)
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Rate of tax (R)
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R 0 – R 245 100
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18% of taxable income
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R 245 101 –R 383 100
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R 44 118 + 26% of taxable income above R 245100
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R 383 101 – R 530 200
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R 79 998 + 31% of taxable income above R 383100
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R 530 201 – R 695 800
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R 125 599 + 36% of taxable income above R 530 200
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R 695 801 – R 887 000
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R 185 215 + 39% of taxable income above R 695800
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R 887 001 – R 1 878 600
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R 259 783 + 41% of taxable income above R 887000
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R 1 878 601 and above
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R 666 339 + 45% of taxable income above R 1 878 600
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Rebates and tax thresholds have not increased for the tax year 1 March 2026 to 28 February 2027 and remain as follows:
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Category
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Rebates
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Tax Threshold
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Primary <65 years old
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R 17 820
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R 99 000
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Secondary 65 to 75 years old
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R 27 585
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R 153 250
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Tertiary >75 years old
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R 30 834
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R 171 300
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Interest Exemption
The interest exemption thresholds remain as follows:
- R 23 800 per annum for taxpayers under the age of 65 years and
- R 34 500 per annum for taxpayers aged 65 years and older.
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Income Tax: Companies
The Corporate income tax rate remains at 27%.
Income tax: Small Business Corporations
The tax rates for Small Business Corporations for fiscal year ending on any date between
1 April 2026 and 31 March 2027 are as follows:
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Taxable income (R)
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Rate of tax (R)
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R 0 – R 99 000
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0% of taxable income
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R 99 001 – R 365 000
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7% of taxable income above R 99 000
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R 365 001 – R 550 000
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R 18 620 + 21% of taxable income above R 365 000
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R 550 001 and above
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R 57 470 + 27% of taxable income above R 550 000
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Turnover Tax: Micro Businesses
The tax rates for Micro Businesses for fiscal years ending on any date between 1 March 2026 and 28 February 2027 are as follows:
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Taxable income (R)
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Rate of tax (R)
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R 0 – R 600 000
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0%
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R 600 001 – R 950 000
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1% of the amount above R 600 000
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R 950 001 – R 1 400 000
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R 3 500 + 2% of the amount above R 950 000
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R 1 400 001 – R 2 300 000
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R 12 500 + 3% of the amount above R 1 400 000
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Transfer Duty
Transfer duty rates and thresholds have remained the same. Therefore, there is still no transfer duty payable on property purchases below R1 210 001.
Medical aid tax credits
Medical aid tax credits have increased to R376
per month for each taxpayer and the first dependent, and R254 for any additional dependents.
Savings and Retirement Fund Changes
The tax tables for lump sum tax-free retirement and withdrawal payments remain unchanged.
The tax-free amount that can be withdrawn at retirement is R550 000. However, to promote savings, the following thresholds were adjusted as follows:
- the retirement fund contribution deduction limit has been increased from R350 000 to R430 000.
- the retirement interest de minimis threshold for annuitisation will increase from R247 500 to R360 000.
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In addition, the tax - free investment exemption threshold has increased from R36 000 to R46 000 per tax year. The overall limit of R500 000 was not adjusted
Subsistence Allowance
The daily subsistence allowance for local
travel increases to R595 per day for meals and incidental costs and R184 per day for incidental costs alone
Exchange Control Regulations
The single discretionary allowance for individuals of R1 million has been increased
to R2 million per calendar year.
Fuel Levy
The general fuel levy will increase by 9 cents per litre for petrol and 8 cents per litre for diesel. The road accident levy increases by 7 cents per litre.
SARS Travel Rate
The new prescribed SARS travel rate effective 01 March 2026 is R4,95 per km.
VAT
The VAT rate has remained unchanged at 15%. However, the compulsory VAT registration threshold has increased from R1 million to R2,3
million and the voluntary VAT registration threshold has increased from R50 000 to R120 000, with effect from 1 April 2026.
Donations Tax
The Donations Tax exemption threshold increased from R100 000 to R150 000 per
annum for any donations made by individuals.
Capital Gains Tax
The capital gains tax rate remains the same, however the following changes have been made to the thresholds:
- An increase in the primary residence exclusion from R2 million to R3 million.
- An increase in the annual exclusion for capital gains tax purposes for individuals and special trusts from R40 000 to R50 000.
- Natural persons in the year of death have increased from R300 000 to R440 000.
- An increase in the capital gains tax exemption from R1,8 million to R2,7 million for the sale of a small business, where the market value of all the assets does not exceed R15 million and if the natural person is older than 55 years.
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National online gambling tax
In addition to the current taxes, there is a proposal of a 20% tax on gross gambling revenue generated by online gambling. Further consultation will take place during the year
For more information
on the above and other tax changes, please refer to the comprehensive 2026/2027 PKF taxation guide.
Reetesh Balgobind | Head: Finance
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