The 2026 National Budget’s priorities

South Africa enters the 2026 National Budget season at a moment charged with both urgency and possibility. Only a year ago, the postponement of the 2025 National Budget Speech signalled deep uncertainty. Yet by the close of 2025, the tone had shifted: the Medium-Term Budget Policy Statement (MTBPS) offered reassurance, reform energy accelerated, and government reaffirmed its resolve to steady the nation’s finances and rebuild confidence.

Today, the question is whether the country can sustain the momentum required to turn these early gains into lasting progress.

As Deloitte Africa, our pre-budget insights and predictions by our subject matter specialists reveal that we must continue this momentum to restore investor confidence and maintain economic optimism. Below is an overview of some of these pre-budget predictions:

Fiscal consolidation and revenue enhancement

The 2026 Budget, scheduled for 25 February, aims to maintain fiscal consolidation by narrowing the deficit, stabilising debt, and boosting investor confidence. Following the MTBPS, public debt is projected to stabilise, and a primary surplus is expected. However, slow growth and expenditure pressures require continued fiscal restraint through tax changes, efficient spending, and anti-waste measures to improve creditworthiness.

Key in the next year will be further modernisation of tax administration. The South African Revenue Service (SARS) will step up compliance, digital initiatives, and enforcement to close the revenue gap. The ongoing VAT Modernisation Project will advance real-time reporting, e-invoicing, and oversight, with businesses facing increased audits – potentially an alternative to a rate hike.

A new customs Voluntary Disclosure Programme will allow importers and exporters to regularise past errors, align with global standards, enhance compliance, and provide greater certainty for cross-border trade.

Transfer pricing: Certainty, capacity building, and simplification

Transfer pricing is part of SARS’ strategy to protect revenue, with efforts shifting toward administrative efficiency and certainty. The advance pricing agreement programme is underway, offering multinationals more predictability and reducing long disputes. There's also discussion about adopting simplified methods for low value-adding intra-group services to reduce compliance costs, provided safeguards are in place.

SARS is leveraging technology, such as databases and artificial intelligence, to enhance transfer pricing enforcement and continues to recruit and train specialists for balanced enforcement and investor certainty.

VAT remains essential for revenue and trade policy, with focus on stricter compliance, clearer export rules, and resolving procedural inconsistencies rather than raising rates. Legislative changes should help vendors, cut audit disputes, and support growth, especially through clear export VAT guidance and aligned definitions.

To boost economic growth and attract investment, South Africa needs effective tax incentives for sectors like manufacturing, renewable energy, and digital industries. Modernising these incentives – covering capital outlay, research and development, and energy efficiency – is key to remaining competitive and broadening the tax base.

Sustainable development and a new reform agenda

The 2026 Budget aims to further South Africa’s sustainability goals through expanded carbon taxes, green bonds, and incentives for renewables and electric vehicles – all aligned with global trends. Infrastructure investment in energy, water, and logistics is set to drive growth and jobs. Public-private partnerships are emphasised as essential for unlocking investment and streamlining infrastructure development, aided by regulatory reforms.

The mining sector is undergoing major reforms to boost competitiveness and attract investment, including permitting improvements and VAT exemptions. Reliable energy, efficient logistics, and regulatory clarity are seen as vital for the sector’s future. As the budget nears, the mining industry seeks policy certainty and cost-competitiveness, with initiatives like the Africa Green Minerals Strategy and the Renewable Energy Masterplan key for long-term economic stability and growth.

Looking ahead

Overall, the year ahead will test the government’s resolve to sustain reform momentum, deliver on infrastructure and energy commitments, and build a more resilient, inclusive economy. For taxpayers, investors, and businesses, the evolving fiscal landscape will demand agility, robust governance, and proactive engagement with new compliance frameworks – those that will hopefully be highlighted or hinted at in this year’s National Budget Speech.

As this booklet demonstrates, the 2026 National Budget is a catalyst for transformation, offering both challenges and opportunities for those prepared to navigate its complexities, as we aim for a more sustainable and inclusive economic future.