A close watch on debt collections and enhanced compliance measures can be expected.
One thing most South Africans do not want this year is three budgets. What they likely want is some tax relief.
But if the promises of improved tax collections by the South African Revenue Service (Sars) do not materialise, taxpayers will probably be faced with additional tax measures.
The 2026 Budget Speech will be delivered on Wednesday 25 February, with all eyes on Sars to see whether the tax increases pencilled in during last year’s budget can be averted.
The ANC in the government of national unity actively pressed for an increase in the value-added tax (Vat) rate, trying to plug revenue shortfalls of around R20 billion due to persistent public spending, low economic growth, and rising debt.
National Treasury allocated an additional R7.5 billion over the medium term for Sars to build human and technological capacity to enhance compliance and increase debt collection by R20 billion to R50 billion a year.
During the Medium-Term Budget Policy Statement in November last year, Finance Minister Enoch Godongwana revised the gross tax revenue estimate for the current tax year up by R19.7 billion to just more than R2 trillion.
He said if collections remained strong the proposed additional tax measures (the R20 billion for 2026) could be withdrawn, emphasising reliance on better enforcement rather than new hikes to support fiscal sustainability.
ALSO READ: Pressure on Sars to prevent tax increases in 2026
New taxes
However, just before December National Treasury published a discussion paper proposing the introduction of a 20% online gambling tax – with claims that it could bring in an additional R10 billion for the fiscus.
The gambling industry did not take too kindly to the discussion document, saying there was no consultation with prominent stakeholders and that there might be constitutionality issues.
The document proposes that all providers of online betting and interactive gambling – licensed or not in SA – pay a 20% national tax on their gross gaming revenue (GGR).
This will be an additional tax on top of provincial taxes that range between 6% and 9%, Vat of 15% and corporate income tax of 27%.
The South African Bookmakers’ Association (Saba) said in an earlier statement that if the national tax is introduced it would result in an effective tax rate of close to 40% for licensed bookmakers.
“As history has consistently shown, and is acknowledged in the (discussion) paper itself, unduly high or punitive tax rates generally have the counter-productive effect of imploding the legitimate market, resulting in the exodus of legal operators and a burgeoning underground industry, none of which serves the interests of either the economy or the problem [of the] ‘pathological’ gambler,” says Saba CEO Sean Coleman.
The fact that National Treasury proposes raising revenue from illegal gambling activities (unlicensed interactive gambling) has also raised eyebrows.
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International trends
Internationally, there are shifting economic realities and quite a few tax developments.
According to international tax firm Regan van Rooy, businesses operating across borders, particularly in and with exposure to African markets, will be facing fresh tax compliance obligations.
One of the “most consequential international tax implementations” is the global minimum tax framework, developed as part of the Organisation for Economic Cooperation and Development and the G20 Inclusive Framework.
The aim is to get large multinational enterprises to pay a minimum effective tax rate of 15% in each jurisdiction where they operate, thereby curbing profit shifting to low-tax jurisdictions.
“Although the foundational rules have been in development for several years, 2026 is likely to see broader legislative adoption and enforcement of these measures,” the firm says in a statement.
South Africa is advancing its global minimum tax legislation, with tax collections expected to reflect this integration from 2026 onwards.
ALSO READ: Many wealthy taxpayers are leaving SA due to increasingly high taxes
‘Digital’ tax
Regan van Rooy also points out that “digital economy taxation” will remain a priority for both developed and emerging markets.
“Governments are increasingly seeking to capture tax revenue from cross-border digital services and e-commerce activities.”
Countries like South Africa have reformed the Vat rules pertaining to digital services, with updated exemptions and compliance requirements for foreign suppliers providing services to local businesses.
“In 2026, businesses should prepare for tighter Vat compliance environments, including electronic invoicing initiatives, digital filing and real-time reporting, all designed to improve transparency and reduce compliance leakage,” the firm says.
National Treasury will be going into a close-out period from 26 January to 24 February where it will not engage with the media or investors as it prepares for the 2026 Budget.
This article was republished from Moneyweb. Read the original here.