The South African National Treasury published its 2024 Medium Term Budget Policy Statement (MTBPS) On 30 October 2024, which includes key legislative proposals such as the Global Minimum Tax Bill and the Global Minimum Tax Administration Bill. These bills aim to implement the Pillar 2 Global Anti-Base Erosion (GloBE) Rules in South Africa.
The legislation introduces two main components: an Income Inclusion Rule and a Domestic Minimum Top-up Tax, while notably excluding an Undertaxed Payments/Profits Rule. If passed, these measures will take effect on 1 January 2024, applying to fiscal years that begin on or after this date.
The MTBPS outlines a pro-growth agenda to address South Africa’s ongoing economic challenges. In the wake of the COVID-19 pandemic, the government has focused on restoring economic growth and stabilizing public finances. This commitment is bolstered by a more supportive environment and an emphasis on effective reforms.
The report highlights a strong foundation for growth and job creation, particularly with the upcoming 2024 elections, which are expected to foster a government of national unity. This reflects the effectiveness of South Africa’s Constitution and institutions. The domestic financial market remains robust, and significant progress has been made in macroeconomic policy, including reduced inflation and a primary budget surplus for the 2023-24 financial year.
Looking ahead, South Africa plans to leverage its G20 Presidency to promote an Africa-focused global agenda, which will focus on enhancing regional trade, reforming multilateral institutions to elevate the influence of Sub-Saharan Africa, and attracting increased foreign investment into the country and the region.