By Lesedi Sibiya-Diplomatic Insider

Minister of Finance, Enoch Godongwana, delivered his budget speech for 2026, in which the National Treasury had achieved success in regards to achieving its broad fiscal consolidation and debt stabilisation plans while at the same time providing individual taxpayers with long delayed tax relief amounting to R13.7 billion in lost revenue to the fiscus.

Adjustments will be made in regards to income tax brackets as well as medical tax credits by 3.4% in line with expected inflation rate for 2026, as well as rebates and tax thresholds have also been raised.

 The R20 billion in tax increases has been avoided as a total revenue overrun of R28.3 billion for 2025/26 compared with the 2025 budget. R22 billion has been allocated to non-interest expenditure, specifically for infrastructure for Transnet, the Durban container terminal, the Passenger Rail Agency of South Africa (PRASA) and Sentech. 

The speech also highlighted improvements over the course of three years such as gross loan debt as a percentage of GDP, the gradual decline in the budget deficit and the promise of primary budget surplus, when revenue exceeds non-expenditure, of 0.9% of GDP in 2025/26 and 2.3% in 2028/29.

 In the upcoming three years principal debt and interest payments are expected to be R21billion lower than the MTBPS projections which will mark the first time a fiscal framework where debt services grow more slowly than overall expenditure.

 Debt Service costs are projected to be revised down by R10.6 billion over the medium term due to lower inflation and lower interest rates.

 The treasury also highlighted that there will be economic growth of 1.6% in 2026, which is slightly higher than the 1.5% estimate in the MTBPS, and it is projected to grow by 1.7% in 2027, and 2% in 2028. 

Expenditure on infrastructure over the next three years will total R1.07 trillion, which will be funded by the fiscus, own revenue and private investors. 

The Treasury said that it will introduce legislation which will provide a principal based obligation in order to facilitate fiscal sustainability in law.