South Africa | National Budget Speech 3.0 – Highlights (21 May 2025)

South Africa | National Budget Speech 3.0 – Highlights (21 May 2025)

South Africa’s third national budget speech for 2025 was presented by Finance Minister Enoch Godongwana on 21 May 2025, revising key figures from the budget delivered on 12 March 2025.
 Here’s a summary of the most notable changes:
 
Budget Adjustments at a Glance
  1. VAT update: The VAT rate remains at 15%, and the proposed changes to zero-rated items announced in March have been withdrawn.
  2. Fuel levy increase (effective 4 June 2025): Petrol: +16c/litre and Diesel: +15c/litre. Note: March’s budget had proposed no increase.
  3. No changes to tax rates: Corporate income tax rates remain unchanged. Personal income tax brackets are still not adjusted for inflation (fiscal drag continues).
Updated 2025/26 Fiscal Outlook
  1. Budget deficit revised to 4.8% of GDP (previously 4.6%)
  2. Debt-to-GDP ratio now expected to stabilise at 77.4% (up from 76.2%)
  3. To offset the shortfall caused by the withdrawn VAT hike (estimated at R75 billion), government has opted for spending cuts rather than new taxes, reducing expenditure by R69 billion over the medium term.
Government Income & Spending Shifts for 2025/26
  1. Sources of government income in 2025/26:

  1.  Government spending in 2025/26:


All other budget proposals remain unchanged.
 Access the full May 2025 budget documentation here: https://www.treasury.gov.za/documents/National%20Budget/2025May/