Budget 3.0: What Accountants Can Expect on 21 May
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South Africa’s 2025 national budget is getting a do-over—again.
After weeks of political wrangling and two failed attempts, Finance Minister Enoch Godongwana will table Budget 3.0 on 21 May 2025. For accountants, this means a fresh round of fiscal forecasts, revised spending plans, and major updates to share with clients, especially those watching tax, investment, and government contract flows.
Here’s what you need to know:
❌ VAT Increase Cancelled (For Now)
The proposed 0.5% VAT hike is officially off the table. This follows legal pressure from political parties and widespread public backlash. While this may seem like a win for consumers, it leaves a R75 billion shortfall in the fiscus over the next three years.
For accountants, that means preparing for:
Expenditure cuts instead of tax hikes
Possible adjustments to relief measures for low-income households
More scrutiny on how government spending is managed
📉 Budget Chaos, Explained
Godongwana admitted the budget process has been "messy"—one budget withdrawn before it was tabled, another pulled after being presented. The confusion reflects deep tensions in the Government of National Unity (GNU), where political consensus is fragile. The key impacts include:
Delayed implementation of some fiscal policies
Greater uncertainty for clients in public procurement, grants, and sector funding
A new budget process is being planned to avoid a repeat of this fiasco.
💰 What Will Budget 3.0 Cover?
The 21 May budget will include:
A new fiscal framework with updated economic and tax assumptions
A revised Appropriation Bill and Division of Revenue Bill
Updates to borrowing plans and debt targets.
Until then, government spending continues under emergency rules:
Up to 45% of last year’s budget is being used to fund departments
Transfers to municipalities and provinces are also capped at 45%.
🧾 What Should Accountants Do?
Here’s how you can help your clients stay ahead of the changes expected in Budget 3.0:
Prepare for expenditure shifts that may affect your clients (especially in public-sector contracts, compliance, or NPOs)
Watch for adjustments in SARS allocations and enforcement priorities (including new focus on illicit trade)
Keep clients informed about delays in funding, policy changes, and risk to service delivery
📌 Bottom Line
Budget 3.0 is a wake-up call for all South Africans. With a strained tax base, unpredictable coalition politics, and growing risks of further disruption, uncertainty is the new normal. While National Treasury promises transparency and a path to stabilising debt, accountants must stay sharp, stay informed, and make informed decisions when guiding clients through the shifting landscape.
🗓️ Save the Date: Budget 3.0 will be tabled on Wednesday, 21 May 2025.
Read more from the Media Statement issued by National Treasury.
