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MEDIUM TERM BUDGET POLICY STATEMENT TABLED, WITH 2025/26 TAX BILLS
- 12 November 2025
- Parliament
- SA Legal Academy
Please note: In anticipation of MTBPS parliamentary hearings on 19 November 2025, the National Assembly’s Standing Committee on Finance and NCOP Finance Committee have issued a joint notice calling for written submissions by 17 November 2025.
Finance Minister Enoch Godongwana’s widely reported announcement of an ‘immediately’ effective new inflation target was the only policy change to feature in his Medium Term Budget Policy Statement (MTBPS) speech. To be ‘implemented over the next two years’, the 3% target ‘with a 1 percentage point tolerance band’ replaces ‘the previous target range’ of 3-6%’. National Treasury has since issued a media statement confirming the announcement.
According to the Minister, on the positive side this is expected:
- to ‘decrease inflation expectations and inflation’, thus
- ‘creating room for lower interest rates’
- ‘supporting household spending and business investment’, and
- ‘boosting economic growth and job creation’.
He nevertheless conceded that the new target does have certain negative implications. It is likely to incur ‘short-term fiscal costs’, including:
- ‘lower nominal GDP and revenue growth’, and
- making ‘achieving fiscal targets more challenging’.
Those notwithstanding, in the Minister’s view ‘the long-term benefits of taking this step far outweigh these costs’. This is noting that ‘the one percentage point band provides (the necessary) flexibility to accommodate any unexpected inflationary shocks’.
- speech
- media statement on new inflation target
The following documents have now been tabled in Parliament:
- MTBPS 2025/26
- Taxation Laws Amendment Bill 2025/26
- Tax Administration Laws Amendment Bill 2025/26
- Division of Revenue Amendment Bill 2025/26
- Adjustments Appropriation Bill
Please click the link below to access additional MTBPS-related documents:
Published by SA Legal Academy Policy Watch
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