Budget 2026: Treasury targets multinationals with new global tax rules

National Treasury has confirmed that the government will implement updated global minimum tax rules during the 2026/2027 cycle.

The move is a strategic effort to reduce profit shifting by multinational corporations and ensure a more equitable fiscal landscape.

The implementation of these rules is expected to significantly reduce the likelihood of corporations taking advantage of negligible or zero tax rates in foreign jurisdictions. By aligning with international standards, South Africa aims to protect its tax base from being eroded by aggressive offshore tax planning.

Finance Minister Enoch Godongwana doubled down on this commitment during the Budget 2026 speech delivered in Parliament on Wednesday.

REVENUE PROJECTIONS AND ECONOMIC IMPACT

While the reform is a pillar of the new budget, revenue estimates have been adjusted:

Current Estimate: R2 billion in tax revenues is expected for the 2026/27 period.

Previous Estimate: The initial projection stood at R8 billion.

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South Africa remains heavily reliant on corporate and personal income taxes, which combined to account for approximately 55% of total tax revenue in 2023.

Godongwana noted that rising corporate profits have already provided a much-needed boost to the national fiscus.

“Over the past three years, our tax system has demonstrated resilience despite slow economic growth,” Godongwana stated. “For 2025/26, the gross tax revenue is revised up by R21.3 billion compared to the estimate in the 2025 Budget. Higher-than-expected net VAT, corporate income tax and dividends tax collections improved the in-year outlook.”