MTBPS 2025: What to Expect as Treasury Walks the Tightrope
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Finance Minister Enoch Godongwana will table the 2025 Medium-Term Budget Policy Statement (MTBPS) in Parliament on 12 November, amid rising debt, sluggish growth, and limited fiscal space. With the economy under pressure, this mid-year update will reveal how government plans to balance restraint, reform, and recovery.
But it’s not all bad news. Several recent developments could support a more optimistic outlook, including:
South Africa’s removal from the FATF greylist, boosting investor confidence.
Stronger-than-expected tax revenue collection thanks to commodities and improved SARS enforcement.
Positive momentum in the bond market, lowering borrowing costs.
Incremental progress on key structural reforms under Operation Vulindlela.
Ongoing commitment to spending discipline—without introducing new taxes.
The MTBPS will set the tone for 2026 and beyond, impacting tax policy, infrastructure funding, investor sentiment, and the business climate. Here’s what we can expect.
Limited Room for New Taxes—But Revenue Pressure Remains
State debt continues to grow, projected to reach around 78% of GDP, Treasury is not expected to introduce major new taxes in the MTBPS. Instead, the focus is likely to be on tightening spending and improving tax collection efficiency through SARS. That means SARS may receive further support to expand compliance enforcement. Tax practitioners should expect continued emphasis on:
✅ Stricter enforcement of VAT and PAYE compliance.
✅ Greater scrutiny on high-net-worth individuals and companies with offshore structures.
✅ Enhanced use of data analytics and AI to track tax evasion.
✅ For your clients, this means no new tax hikes for now—but more audits, more enforcement, and less tolerance for non-compliance.
Fiscal Consolidation Without Shocks
Treasury is likely to stick to its fiscal consolidation path, aiming to reduce the budget deficit without drastic shocks to the economy. Spending cuts may continue in underperforming areas, while funding is protected for key sectors like energy, transport logistics, and policing. The focus will remain on:
✅ Reducing waste and improving spending efficiency.
✅ Slowing the growth of the public sector wage bill.
✅ Reprioritising funds rather than expanding overall budgets.
This could impact municipalities, SOEs, and other public bodies your clients work with, especially if they're tendering for government contracts or rely on state-linked business.
Growth Over Tax Hikes: Structural Reforms
There’s a growing consensus that South Africa can’t tax its way out of its financial problems. Real economic growth is essential, and that means unlocking private sector investment through reform.
Expect the MTBPS to re-emphasise progress (albeit slow) on Operation Vulindlela, with updates on key bottlenecks like:
✅ Energy security and Eskom’s debt restructuring.
✅ Port and rail improvements via Transnet reforms.
✅ Water infrastructure and governance.
✅ Business visa and immigration reform to attract skilled workers.
Help your practice and your clients to benefit from these reforms, especially in sectors linked to energy, infrastructure, or export logistics.
