South Africa’s estimated revenue collections have been revised up by R17 billion, according to the Medium-Term Budget Policy Statement (MTBPS) tabled in Parliament.
Main budget revenue is now R54 billion higher than the February Budget estimate of just over R2 trillion. Strong tax income and lower debt costs have helped shield the economy from global price shocks linked to conflict in the Middle East, Moneyweb reported.
Personal income tax, company tax and value-added tax (VAT) all did better than expected, the MTBPS showed.
Provisional corporate income tax collections grew by 17.4% in the first six months, compared with the same period last year. Mining was the largest contributor.
In June 2026 alone, mining collections were R11 billion higher than in June of the year before. This was due to higher prices for platinum group metals and gold. Strong company profits also supported dividends tax collections.
Salary increases for public servants and financial sector workers lifted personal income tax, even though fewer people had jobs. The unemployment rate rose by 2.2 percentage points to 33.6% in the second quarter.
About 1.8 million more people are unemployed now than before the Covid-19 pandemic.
Domestic VAT collections gained from higher household spending. Together with lower VAT refund payments, this made up for weaker VAT collections on imports.
Some tax experts are worried that honest taxpayers are having refunds held back because of suspected fraud. Nico Theron, founder of Unicus Tax Specialists, earlier said taxpayers were caught between the South African Revenue Service (SARS) and fraudsters.
“We are seeing a trend where refunds were paid out for several years and then, for no apparent reason, they are withheld. Only when there are threats of legal action the reason for withholding it is given,” Theron said.
He said that in many cases, refunds were held back because of “a larger investigation”.
SARS Commissioner Dr Ngobani Johnstone Makhubu said the revenue service’s compliance drive had brought in R138 billion. Of this, R52 billion came from debt collection.
Not all income went up. Temporary relief on the general fuel levy between April and June, along with changes in how people buy fuel, cut fuel levy collections by almost R31 billion.
This gap will be covered by unused surpluses in public entities. It will also be covered by R10 billion moved from the Central Energy Fund to the National Revenue Fund in 2025/26.
Finance Minister Enoch Godongwana expects tax collections to stay strong over the medium term. High commodity prices are giving revenue a short-term boost. Fuel levy collections are expected to return to normal after relief measures that run from 4 November until January.
Compared with the 2026 Budget, main budget revenue estimates for the next two years were raised by R70.8 billion. This was mostly due to higher tax revenue forecasts.
Godongwana said spending efficiency remains a central priority. Savings efforts have produced R38.1 billion, which will be moved to priority spending areas over the medium term.
The government’s findings on ghost workers are being put together and will be published in the 2027 Budget.
More details on a national gambling tax, including a proposed 20% tax on online gambling, will come in next year’s Budget. “Consultations are ongoing on the proposed tax design, its linkages to the existing regulatory framework, and the implications for provinces and the currently regulated market,” Godongwana said.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.