Discover how the 2026 Budget's tax reforms, driven by insights from over 1,200 small business owners, aim to provide crucial relief and support for South Africa's economic backbone.
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This year's budget announcement has garnered significant attention, especially from South Africa’s small business community, with over 1,200 citizens contributing their insights and suggestions.
During South Africa's Minister of Finance, Enoch Godongwana's 2026 National Budget Speech, the minister highlighted government's response to the calls for help from the SME sector.
Godongwana said that, Renette Oosthuizen, a small business owner from Gauteng, had this tip:
“Minister Godongwana, please increase the VAT registration threshold for small businesses to R2 million. The R1 million threshold has not kept pace with the cost of doing business.”
"Renette, you will be happy to know that in this budget the compulsory VAT registration threshold increases from R1 million to R2.3 million," Godongwana said.
The Minister said that government is taking other measures to support small businesses.
Budget 2026 logo. As South Africa gears up for its vital budget, what can consumers expect?
Image: File.
He said that National Treasury will be raising the capital gains tax exemption for the sale of a small business for olderpersons from R1.8 million to R2.7 million.
" This applies to small businesses worth R15 million instead of the R10 million previously. It will enable small business owners toreceive more tax relief when they sell their businesses," Godongwana announced.
Financial relief does not stop there.
The budget also proposed a significant increase to the capital gains tax exemption for older business owners selling their small enterprises.
This exemption will be lifted from R1.8 million to R2.7 million, and will now apply to small businesses valued at up to R15 million, rather than the previous limit of R10 million.
This change is poised to provide greater tax relief, enabling owners to retain more of the profit when transitioning out of their ventures.
While these reforms are welcomed by many, Minister Godongwana emphasised that increases to certain taxes remain unavoidable in the current economic climate, underscoring the balance that must be struck between fiscal responsibility and supporting South Africa's economic backbone, its small businesses.
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