South African Budget 2025 – Tax Proposals

Corporate Income Tax Rate:Remains the same at 27%.

Personal Income Tax:Personal income tax brackets remain unchanged. The primary, secondary and tertiary rebates also remain unchanged. National Treasury anticipates that additional revenue will be raised by not adjusting these brackets for inflation. It is interesting to note that the initial Budget Documents that related to the original February Budget did propose increases to these thresholds.

VAT:Increases by 0.5 percentage points with effect from1 May 2025and a second 0.5 percentage point increase will take effect from1 April 2026. Therefore, the VAT rate increases from 15% to 15.5% on1 May 2025and to 16% on1 April 2026.
The basket of items that are zero-rated for VAT will be expanded to include specific edible offal, specific meat cuts, unflavoured dairy liquid blends and specific canned vegetables to assist poor households.

Capital Gains Tax:No changes are proposed in respect of Capital Gains Tax.

Medical Scheme Fees Tax Credit:The Medical Scheme Tax credits remain unchanged.

Excise Duties:Excise Duties on alcoholic beverages will increase by 6.75%, which is above inflation. In addition, there will be an increase of 6.75% in excise duties on cigars and pipe tobacco and 4.75% on cigarettes and other tobacco products.

Fuel Levies:No change to the general fuel levy and road accident levy. However from2 April 2025the Carbon Fuel Levy will increase by 3c on both petrol and diesel.

Transfer Duty:The monetary thresholds for Transfer Duty will be adjusted by 10 per cent to compensate for inflation. The Transfer Duty tax rates will remain unchanged. These changes will come into effect on1 April 2025.

Carbon Tax:Increased from R190 per tonne to R236 per tonne of the carbon dioxide equivalent.

Estate Duty and Donations Tax:Estate Duty and Donations Tax rates remain unchanged.