Experts don’t expect a VAT hike when Godongwana tables 2026 budget

Experts at auditing firm Deloitte don’t expect a value-added tax (VAT) hike when Minister of Finance Enoch Godongwana tables Budget 2026 on Wednesday.

Despite fiscal pressures, Godongwana is likely to avoid tabling a proposal for higher VAT after public sentiment and political opposition forced him to withdraw a hike in 2025.

Treasury later made expenditure adjustments to cover a projected shortfall of R75 billion.

In this cycle, Deloitte said Treasury will look to the South African Revenue Service (SARS) to pursue efficiency gaps and tax reform through alternative methods.

The associate director for business tax at Deloitte, Mamohlwa Mohlola, said a VAT increase is likely off the table.

ALSO READ | Budget speech 2026: DA expectations

“I mean, when it was increased a few years ago, there were plans to make a lot of money, but I don't think the budgeted increase at the time actually materialised.”

The revenue service has already signalled a shift towards broader efforts to transform tax processes and close the fiscal gap through its VAT modernisation project initiated in 2023.

“I don't anticipate that they'll have high taxes from a corporate tax perspective, but I do believe they will continue to make sure that the methods that they're using to collect, they will strengthen that. Around employee taxes or individual taxes, even there, I do anticipate that they might have inflationary increases, but I don't anticipate having more increases there. So, the money will probably come from collecting, collecting, collecting”

Mohlala said a tightened compliance model may encourage vendors to invest in more robust governance processes and adopt better data sources and internal controls, ultimately paving the way for VAT modernisation as the natural next step.