National Treasury has proposed an inflation-linked increase to the general fuel levy, for the first time in three years.
Finance Minister, Enoch Godongwana, tabeld the 2025 budget
on Wednesday, at the Cape Town International Convention Centre, deemed as
Parliament, for this plenary sitting.
“For the 2025/26 fiscal year, this is the only new tax
proposal that I am announcing. It means from 4 June this year, the general fuel
levy will increase by 16 cents per litre for petrol, and by 15 cents per litre
for diesel,” said Godongwana.
COURTESY: X - @GovernmentZAHe said the general fuel levy has remained unchanged for
the past three years to provide consumers with relief from high fuel price
inflation.
Godongwana warned that this tax measure alone will not
close the fiscal gap over the medium term.
“The 2026 Budget will therefore need to propose new tax
measures, aimed at raising R20 billion. We have allocated an additional R7.5
billion over the medium-term expenditure framework (MTEF), to increase the
effectiveness of the South African Revenue Service (SARS) in collecting more
revenue.
“Part of this allocation will be used to increase
collections from debts owed to the fiscus. SARS has indicated that this could
raise between R20 billion to R50 billion in additional revenue per year,” the
Minister said.
Another part of the additional allocation to SARS will be
used to improve modernisation. This will include targeting illicit trade in
tobacco and other areas, which should boost revenue over the medium term.
“As SARS utilises this investment to raise additional
revenue, which I believe can be at least R35 billion, the R20 billion to close
the current revenue gap will not have to be raised through taxes.
“Madam Speaker, let me call on every South African, be they
individuals, small business operators or large corporates, to honour their tax
obligations and contribute to building a better and more equitable nation,” the
Minister said.
He thanked all the taxpayers that continue to pay their
taxes while emphasising that government does not take taxpayers for granted.
“As a government, we know that we must earn the taxpayer’s
trust every day, by spending public money with care and ensuring that every
rand collected is spent on its intended purpose. We recognise the urgent need
to do more to achieve this goal. We are not deaf to the public’s concern about
wasteful and inefficient expenditure.’’
“Our commitment to collect taxes must be matched by better
efficiency in how that money is spent. It must be matched by much stricter
oversight that quickly identifies problems and provides timely solutions when
things go wrong,” added Godongwana.
Meanwhile, as a result of the withdrawal of the proposed VAT
increase, the expansion of the zero-rated basket, which was included to protect
poorer households from the VAT rate increase, falls away. The Minister, in
April, requested the Speaker of the National Assembly to maintain the VAT rate
at its current level of 15% , reversing the previously proposed 0.5 percentage
point increase presented in the 12 March budget.
“Madam Speaker, compared to the March estimates, tax
revenue projections have been revised down by R61.9 billion over the three
years. This reflects the reversal of the VAT increase and the much weaker
economic outlook. In this difficult environment, it remains vital that we still
take actions to increase revenue to protect and bolster frontline services,
while expanding infrastructure investments to drive economic activity,” the
Minister said.
Done by: Shaneca Cupido
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