2026 budget speech 2025 and grant changes explained

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South Africa’s 2026 Budget sets out tax changes, social grant increases and fuel levy adjustments that will affect households from April 2026.

Finance Minister Enoch Godongwana tabled the Budget in Parliament on 25 February 2026, outlining updates to personal income tax, VAT thresholds, excise duties and social grants.

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What is happening?

The 2026 Budget confirms:

• Personal income tax brackets will be adjusted in line with inflation
• The VAT registration threshold increases from R1 million to R2.3 million
• Excise duties on alcohol and tobacco rise in line with inflation
• Fuel levies increase for petrol and diesel
• Social grants increase from April 2026
• The Social Relief of Distress grant continues in its current form

Government says the budget deficit narrows to 4.5% of GDP in 2025/26 and debt stabilises at 78.9% of GDP before declining over the medium term.

Why it matters to you

These changes affect:

• Monthly grant payments
• Fuel prices
• Small business VAT obligations
• Personal tax bills
• Prices of alcohol and tobacco
• Retirement and tax-free savings contributions

Therefore, households must plan for fuel and excise increases, while some taxpayers will receive bracket relief. Meanwhile, small businesses may benefit from a higher VAT registration threshold.

What you need to know

1. Social grant increases from April 2026

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The Social Relief of Distress grant continues in its current form for the year ahead.

For related updates, visit our SASSA Grants coverage hub.

2. Personal income tax relief

Government will:

• Adjust personal income tax brackets fully in line with inflation
• Increase the annual tax-free investment limit from R36 000 to R46 000
• Raise the retirement fund deduction limit from R350 000 to R430 000

This means taxpayers may avoid bracket creep while saving more tax-free.

3. VAT threshold change for small businesses

The compulsory VAT registration threshold increases:

• From R1 million
• To R2.3 million

This reduces compliance pressure for smaller businesses earning below the new threshold.

For more small business updates, see our Jobs & Opportunities section.

4. Fuel levy increases

From 2026/27:

• General fuel levy rises by 9c per litre for petrol
• 8c per litre for diesel
• Carbon fuel levy rises by 5c (petrol) and 6c (diesel)
• Road Accident Fund levy increases by 7c per litre

Motorists should expect these increases to reflect in pump prices.

5. Alcohol and tobacco excise increases

Tobacco:

• Cigarettes rise from R22.81 to R23.58 per pack
• Pipe tobacco up 28c per 25g
• Cigarette tobacco up 87c per 50g
• Cigars up R4.56 per 23g

Alcohol:

• Beer or cider up 8c per 340ml
• Wine up 15c per 750ml
• Spirits up R3.20 per 750ml

What you should do next

1. Check your grant amount before April 2026.
2. Review your monthly fuel budget.
3. Confirm whether your business still needs VAT registration.
4. Adjust retirement and tax-free savings contributions if possible.
5. Monitor SARS communication for updated tax tables.

If you receive social grants, ensure your SASSA details remain updated to avoid payment disruptions.

Where to get help

• National Treasury: www.treasury.gov.za
• SARS: www.sars.gov.za
• SASSA: www.sassa.gov.za

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