Budget Speech 2025/2026

Tax table
No adjustments were made to the individual tax brackets and rebates. Everyone will therefore pay more tax in line with their annual salary increase.

Capital gains tax (CGT)
The inclusion rate for capital gains remains unchanged at 40% for natural persons and 80% for companies and trusts.

This means the maximum CGT rates are:

• Individuals and special trusts 18%
• Other trusts 36%
• Companies 21.6%
• Individual policyholder funds 12%

Corporate taxes
The rate of corporate income tax remains at 27%. The Global Minimum Tax Act charges a flat rate of 15% on multinationals irrespective of where they operate from, as of 1 January 2024.

Dividends tax and interest exemption
Dividends tax remains at 20% and no changes were made to the interest exemptions either. The exemption remains R23 800 for those younger than 65 and R34 500 for those aged 65 or older.

Motor vehicle expenses
Where an allowance or advance is based on the actual distance travelled by the employee for business purposes, no tax is payable on an allowance paid by an employer to an employee, up to R4.76 per kilometer, regardless of the value of the vehicle.

Trusts
No changes to the taxation of trusts were announced.

Medical aid rebates
No changes were made to the medical tax rebates. The tax credit for the first two dependents remains at R364, and for additional dependents at R246. In order for the NHI to roll out, Government will focus on key enablers that include the following:

• Building a national health information system and
  digital patient records;
• Upgrading health facilities and improving quality of
  care to ensure that they meet the minimum
  criteria to be certified and accredited for
  contracting under NHI;
• Strengthening facility and district management in
  preparation for contracting;
• Granting semi-autonomous status for central (and
  potentially other) hospitals; and
• Developing reference prices and provider payment
  methods for hospitals.

Cross-border treatment of retirement funds

The current treatment of cross-border retirement funds may result in double non-taxation, particularly where South Africa is granted the taxing right by treaty. It is proposed that changes be made to the rules of currently exempt lump sums, pensions and annuities received by South African residents from foreign retirement funds for previous employment outside South Africa, with amendments in the current legislative cycle.

Financial advisers consider relevant tax aspects linked to financial advice, but do not give tax advice as such. We also recommend that clients consult a tax practitioner or expert for tax advice and when completing their tax returns. The opinions expressed in this document are the opinions of the writer and not necessarily those of PSG Financial Services and do not constitute advice. Although the utmost care has been taken in the research and preparation of this document, no responsibility can be taken for actions taken based on information in this newsletter. Should you require further information, please consult an adviser for a personalised opinion.

View full 2025/2026 summary

Some highlights from the Budget speech:

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