Budget 2026: What CIBA Asked For — and What We Achieved
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When CIBA submitted its Pre-Budget 2026 recommendations, we made one central argument:
➡️ South Africa does not need higher tax rates. It needs broader participation, lower compliance friction, and growth-driven reform.
Budget 2026 does not deliver everything CIBA proposed. But in the tax space, it delivers more than many expected, and in several areas, it aligns directly with our submission.
Let’s draw the line clearly between proposal and outcome.
1️⃣ No New Tax Increases — A Major Policy Signal
CIBA warned against increasing pressure on an already narrow tax base. At the time, Treasury had signaled a possible R20 billion tax increase. That increase has now been withdrawn.
This is not cosmetic. It is a strategic decision. Instead of raising rates, the Budget:
Fully adjusts personal income tax brackets for inflation
Adjusts medical tax credits
Adjusts thresholds and limits
Raises the VAT registration threshold significantly.
In a constrained fiscal environment, the decision not to extract more revenue is a clear policy shift toward stabilisation and growth.
✅This aligns directly with CIBA’s position: revenue sustainability must come from expansion, not pressure.
2️⃣ VAT and Small Business Threshold Adjustments — A Direct Win for SMEs
CIBA explicitly recommended adjusting VAT and small business thresholds to reflect economic reality. We argued that R1 million turnover forces early compliance before profitability is achieved.
The Budget increases the compulsory VAT registration threshold from R1 million to R2.3 million. The same adjustment applies for the annual turnover limit for turnover tax. This is substantial, as it provides:
Real breathing room for early-stage enterprises
Reduced compliance cost in the stabilisation phase
Greater reinvestment capacity
A stronger incentive to formalise.
This reform alone materially changes the operating environment for small and growing businesses.
✅It is a direct response to one of CIBA’s headline recommendations.
3️⃣ Inflation Relief After Two Years of Creep
Bracket creep erodes tax morale. After two years without inflationary adjustment, the Budget restores full inflation relief across personal income tax brackets and credits.
This protects disposable income and restores fairness.
✅For practitioners, this is not only about rand values, it is about rebuilding confidence in the system.
4️⃣ Fiscal Discipline and Accountability
CIBA emphasised that tax morale depends on trust in public expenditure.
The Budget reinforces:
Debt stabilisation this year
A declining debt-to-GDP path over the medium term
R12 billion in targeted savings
Ghost worker audits
Early retirement cost controls.
✅These measures directly address concerns CIBA raised about accountability and efficient spending. Tax morale is strengthened when taxpayers see discipline on the expenditure side.
Where Further Work Is Still Required
While there are clear achievements, several areas from the CIBA submission remain unaddressed. These are not failures, they are the next phase of engagement.
🔹Phased Compliance for Micro and Youth Enterprises
The VAT registration and turnover tax threshold increase help. But we still need structured, graduated compliance pathways for micro and youth-owned businesses entering the formal system.
🔹NPO Structural Reform
CIBA made extensive proposals regarding:
Harmonised state–NPO funding frameworks
Risk-based compliance
Streamlined PBO processes
Banking access challenges.
The Budget does not introduce structural NPO reform. Given the scale of social wage spending, this remains critical.
🔹 Targeted Relief for Vulnerable Groups
CIBA recommended:
Capped relief for single-parent households
Simplified disability deductions
Support for youth-owned enterprises.
While social grants continue, targeted tax relief measures for these groups were not introduced. This remains an important policy discussion going forward.
🔹 SME Finance Reform
Contract-backed finance mechanisms and strengthened credit guarantees were not specifically introduced. Access to working capital remains a structural barrier.
The Bigger Picture
Budget 2026 reflects a realistic but meaningful shift.
It does not implement the full reform agenda CIBA proposed. However, compared to expectations earlier this year, the tax outcomes represent a material achievement:
No new tax increases
Full inflation relief
Major VAT threshold reform
Adjusted small business thresholds
A growth-aligned fiscal stance.
In a difficult fiscal climate, this is not insignificant. Reform is rarely delivered in a single budget cycle. But this year demonstrates that growth-focused, technically grounded submissions can influence outcomes. The direction may not be perfect. But it is materially better than expected.
📌 Practical Takeaways for Practitioners
1️⃣ Review VAT Registration Positions
Reassess clients close to the previous R1 million threshold. Some may no longer fall within compulsory registration. Strategic deregistration discussions may be appropriate where permitted. CIBA will provide more hands on guidance on this, so watch this space and avoid complications!
2️⃣ Update Tax Planning for Individuals
Adjust PAYE projections to reflect full inflationary bracket relief. Communicate take-home pay changes proactively to clients.
3️⃣ Revisit Small Business Structuring
Higher thresholds may create planning opportunities around turnover tax and simplified regimes.
4️⃣ Strengthen SME Formalisation Advice
Use the VAT threshold reform as a talking point to encourage informal operators to enter the formal economy under more favourable conditions.
5️⃣ Monitor Legislative Follow-Through
Watch the draft tax bills for technical implementation details. Threshold announcements must translate into workable provisions.
6️⃣ Keep Engaging
Several structural reforms remain open for further consultation. Practitioners should channel operational feedback through CIBA structures to shape the next phase of reform.
Conclusion
Budget 2026 marks an important shift in direction. It recognises that South Africa cannot solve its fiscal challenges by simply increasing tax pressure on those who are already compliant.
The withdrawal of additional tax increases, the significant VAT threshold adjustment, and the return of full inflationary relief show movement toward the growth-focused approach CIBA advocated in its submission. These are practical steps that support businesses, protect taxpayers, and strengthen confidence in the system.
There is still work to be done. Structural reform for micro-enterprises, NPOs, youth-owned businesses, and vulnerable groups remains necessary. But the policy direction is encouraging.
Sustainable revenue depends on expanding participation, simplifying compliance, and rebuilding trust in how public funds are managed. Budget 2026 moves us closer to that goal.
CIBA will continue engaging constructively to ensure that this momentum translates into deeper reform and meaningful implementation in the years ahead.
Read CIBA’s Pre-Budget Submission here.
Access the Budget Documents, including the budget speech from the National Treasury website.
