MTBPS 2025: Quick Facts
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South Africa's 2025 Medium-Term Budget Policy Statement (MTBPS), tabled by Finance Minister Enoch Godongwana on 12 November, offers a clear message: the government is tightening its belt, ramping up reforms, and betting on long-term gains over short-term wins. But for accountants, the devil is in the detail.
Here's what matters:
Growth Still Slow, But Debt is Under Control
The economy is forecast to grow by only 1.2% in 2025 (better than 2024, but less than the original estimate of 1.4%), with a moderate rise to 1.8% by 2028. The big win? For the first time since 2008, government debt will stop rising as a percentage of GDP, stabilising at 77.9% in 2025/26. That means slightly less pressure on interest rates and borrowing costs in the long term.
New Inflation Target is 3%
Government is tightening the inflation target to 3% (with a 1% tolerance). Over time, this could lower inflation expectations and lead to lower interest rates, making cost of living substantially lower for businesses and households.
SARS Gets Stronger — Expect More Collection Muscle
Thanks to better-than-expected tax collections (R19.7 billion more than budgeted), SARS has proven it can deliver. The stronger collection was assisted by SARS’ VAT collections that grew by 7.8% due to “resilient household consumption”.
SARS is also going after tax crimes with the help of reports from the Financial Intelligence Centre on criminal syndicates. It is estimated that over R40 billion has been lost to illegal cigarettes since 2020.
New intelligence partnerships are targeting alcohol, fuel, and procurement fraud.
Practitioners and taxpayers can expect more audits and enforcement.
✅ Good to know: If SARS keeps performing, government may scrap the R20 billion tax hikes planned for 2026.
Infrastructure is the New Spending Priority
Spending is slowly shifting from consumption to investment. Capital spending will grow 7.3% per year. A new R15 billion infrastructure bond is on the way, and PPPs are being modernised. Expect opportunities in transport, water, energy, and logistics.
Municipal Finances Under the Microscope
Failing municipalities will lose direct control of infrastructure budgets, with DBSA and MISA stepping in. Water and electricity reforms are being piloted in Mpumalanga. This is good news for clients in construction, consulting, or local supply chains.
Procurement Goes Public
A new Procurement Payments Dashboard lets anyone see who gets paid what, and when. This is a step forward for transparency and anti-corruption, but also a warning: poor invoicing or contract compliance will be more visible.
Ghost Workers & Grant Fraud Crackdowns
Government is cracking down on payroll fraud and grant abuse. Close to 9,000 suspected ghost employees have been flagged, and social grant double-dippers are being removed.
The Bottom Line for Your Practice
Expect more scrutiny as SARS is investing in compliance.
Help clients prepare for stricter documentation.
Watch infrastructure, PPP, and local government tenders for opportunity.
Prepare for policy shifts in 2026, especially if revenue falls short.
The full MTBPS is a roadmap for where fiscal policy is heading. The focus is on discipline, reform, and gradual recovery. For accountants, that means helping clients stay compliant, competitive, and well-informed.
Keep reading Accounting Weekly for more detailed news on what to expect from the MTBPS!
📄 Source: MTBPS 2025, National Treasury (12 November 2025)
