SARS Moves Fast: Draft Rates Bill Released After Budget Speech

This article will count 0.25 units (15 minutes) of unverifiable CPD. Remember to log these units under your membership profile.

Directly after the Minister of Finance delivered the 2026 Budget Speech, SARS has issued the Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill for public comment. This is the technical legislation that gives legal effect to yesterday’s announcements, and it matters because this is what will actually change your clients’ tax calculations from 1 March 2026.

Summary of the key proposals we need to know

• Personal income tax brackets from 1 March 2026
  New rates of normal tax apply to individuals for years of assessment commencing on or after 1 March 2026 . The updated tax table starts at 18% for taxable income not exceeding R245 100, with revised thresholds across the brackets. This will directly affect PAYE calculations and provisional tax planning.

• Rebates increased

  • Increases are proposed to primary, secondary and tertiary rebates.

  • These are small adjustments, but across payrolls, they matter.

• Medical tax credits adjusted

  Monthly medical scheme tax credits also increase to:

  • R376 for the first and second member (previously R364) and

  • R254 for each additional dependant (previously R246) .

• Retirement fund thresholds increased

  The de minimis threshold allowing lump sum commutation increases from R165 000 to R240 000 across pension, provident and retirement annuity funds . This will impact retirement planning conversations immediately.

• Tax-free investments

  Annual contribution limit increases from R36 000 to R46 000 . Good news for structured long-term savings planning.

• Donations tax

  • Annual exemption for natural persons increases from R100 000 to R150 000.

  • For other donors, the casual gifts exemption increases from R10 000 to R20 000 .

• Capital gains tax exclusions

  • Annual exclusion increases from R40 000 to R50 000.

  • In year of death, exclusion increases from R300 000 to R440 000.

  • Primary residence exclusion increases from R2 million to R3 million.

• Small business relief

  • The qualifying turnover threshold for micro businesses increases from R1 million to R2.3 million.

  • VAT registration threshold increases from R1 million to R2.3 million , with the voluntary registration threshold increasing from R50 000 to R120 000.

• Diamond Export Levy

  • The gross sales threshold is reduced from R3 billion to R2 billion, with alternative compliance options introduced.

• Carbon tax

  • The carbon fuel levy increases from 0.99 cents to 1.29 cents per litre.

Why this matters for CIBA members

If you’re in practice, these changes affect payroll, provisional tax planning, retirement advice, CGT calculations, VAT registrations, and small business structuring. This is billable work, but only if you move first and communicate clearly with clients.

If you’re in commerce, these changes impact payroll systems, deferred tax calculations, budgeting models, and cash flow projections. Boards will expect you to know the detail before it becomes law.

Public comments are now open. This is your opportunity to engage before these proposals are enacted. From CIBA, we will carry on representing our members interest, assessing the impact of the policy through our policy lens: does it simplify the system, reduce compliance burdens, and support economic growth?