Finance Minister delivered 2025 revised budget speech on 21 May 2025. Key tax changes include scrapping proposed VAT rate hikes, removing additional zero-rated items, and increasing the inflation-linked fuel levy.
South Africa’s Finance Minister Enoch Godongwana presented the 2025 revised budget speech on 21 May 2025.
Most tax policies remain mostly unchanged; notably corporate tax rates for companies and small and micro businesses, excise duties, estate duties, donation taxes, dividends taxes, and taxation rates for capital gains.
Compared to the March 2025 budget, the key tax changes include scrapping proposed VAT rate hikes, removing additional zero-rated items, and increasing the inflation-linked fuel levy.
Value added tax (VAT)
The VAT will remain at 15%. The proposed increases in the VAT rate in 2025-26 and 2026-27 have been dropped. In the March 2025 budget, it was suggested that the VAT rate be raised to 15.5% starting 1 May 2025, followed by a further increase to 16% from 1 April 2026.
Expansion of the zero-rated basket
The zero-rated basket, introduced to shield low-income households from the impact of the VAT increase, will no longer be available. In the March 2025 budget, the VAT zero-rated food list had been expanded to include certain meats, offal, dairy blends, and canned vegetables.
Increase in fuel levy
The revised 2025 budget proposed an inflation-linked increase to the general fuel levy. This is the only new tax proposal for the 2025-26 fiscal year. From 4 June 2025, the general fuel levy will rise by 16 cents per litre for petrol and 15 cents per litre for diesel.
