Finance Minister Enoch Godongwana’s 2026 National Budget includes several consumer-facing tax moves aimed at easing pressure on households and encouraging long-term saving. While some expected increases were announced (such as fuel levy and sin taxes), the Budget Speech also offered relief through inflation-linked adjustments to personal income tax brackets and higher limits for tax-efficient saving.
Roxanne Tobias, Actuary and Head of Marketing & Communications at Sanlam Risk & Savings, says: “The tone of this year’s Budget Speech was noticeably more constructive, and it’s encouraging to see measures that give households breathing room, especially through personal income tax relief and stronger incentives to save. The key is to translate those announcements into practical steps in your own budget.”
The big picture for 2026 Government’s message this year was that disciplined public finances and ongoing reforms are starting to show results, including stabilising public debt and improving confidence. For households, the most immediate takeaway is that government is trying to balance anticipated increases with targeted relief, while also nudging South Africans to build savings and retirement provision for the long term.
1. Personal income tax: relief from ‘bracket creep’ Personal income tax brackets and medical tax credits have been adjusted in line with inflation. That matters because these inflation-linked adjustments to personal income tax brackets help protect taxpayers from ‘bracket creep’, potentially leaving a bit more in your pocket to cope with rising costs.
2. Tax-free savings and retirement: higher limits to help you save more To encourage saving, government proposes increasing the annual contribution limit for tax-free savings accounts (TFSA) from R36 000 to R46 000. They are also raising the maximum annual deduction for retirement fund contributions from R350 000 to R430 000.
In plain terms: if you’re able to save, you may be able to put more away in a tax-efficient way, which can support long-term goals like emergencies, education, and retirement.
3. VAT: rate unchanged, plus relief for small businesses There is no change to the VAT rate; it remains at 15%. For small businesses, the compulsory VAT registration threshold increases from R1 million to R2.3 million in annual turnover, which could reduce administrative pressure and help cash flow for smaller operators.
4. Fuel levy: knock-on effects are real Fuel levy will increase broadly in line with inflation, which will filter into transport costs and, over time, the price of goods and services, something South Africans need to factor into their monthly spending.
5. Sin taxes: increases continue Excise duties on tobacco (including electronic nicotine and non-nicotine delivery systems) and alcoholic beverages will increase in line with inflation. For consumers, this means smoking and drinking will cost more, even if the increases are not above inflation.
Roxanne says the most useful response is to focus on what you can control. “This is a good moment to revisit your monthly budget, tighten where you can, and then make the most of any allowances that help you save,” she notes. “If you can afford it, consider using the higher tax-free savings and retirement limits to build resilience; even small, consistent contributions can make a meaningful difference over time.”
If you haven’t yet tried it, Roxanne encourages South Africans to take the Financial Focus Quiz, a free tool to identify financial blind spots and prioritise the areas that will make the biggest difference. “Sanlam also offers an easy personal budget template and specialised tax calculators to help you estimate how changes from the Budget Speech may affect you. For more tailored guidance, speak to a professional financial adviser who can help you build a plan around your needs and goals, so you can secure your family’s future while still enjoying your money today,” she concludes.