2024/25 Budget Review

Written on 02/21/2024
MJ Minter Inc


The Minister of Finance, Mr. Enoch Godongwana, tabled his budget review on 21st February 2024. While tax revenue performed well in 2021/22 and 2022/23 due to high commodity prices, revenue for 2023/24 is now expected to fall short by R56.1 billion. Government has proposed tax increases totalling R15 billion in 2024/25 to alleviate immediate fiscal pressures, while limiting the impact on economic growth. The following were the key tax proposals:

  • Personal income tax
    • No change to personal income tax brackets, rebates, and medical tax credits.
  • Excise duties
    • Increase in excise duties of between 6.7% and 7.2% on alcohol products, and between 4.7% and 8.2% on tobacco products.
  • Fuel and RAF levies
    • No change to the general fuel levy and road accident levy.
  • Climate and environment 
    • The introduction of an electrical and hydrogen-powered vehicle tax incentive, enabling manufacturers to claim 150% of qualifying investment spending, to be introduced from 1 March 2026.
    • Plastic bag levy to increase from 28 cents to 32 cents per bag from 1 April 2024.
  • Learnership tax incentive
    • To be extended by three years to 31 March 2027.
  • Retirement funds
    • Two-pot retirement reform, which enables pre-retirement access to a portion of one’s retirement assets, to be implemented on 1 September 2024.
  • Global minimum corporate tax
    • Multinational corporations to be subject to an effective minimum tax rate of 15%, regardless of where profits are located, from 1 January 2024. 

Over the next three years, tax revenue is expected to grow by R401.7 billion, reaching R2.13 trillion and a tax-to-GDP ratio of 25.3% in 2026/27. However, this will require a combination of prudent tax increases, improved tax compliance and strengthened revenue administration. Most importantly, it will require a commitment to economic growth and long-term base-broadening initiatives - as Mr. Godongwana stated in his speech, “the size and quality of the national pie is what informs, and ultimately determines, the realisation of our political imperative of redistribution."

If you need any more information on this, please feel free to contact our offices.