{"id":816563,"date":"2025-03-12T17:00:00","date_gmt":"2025-03-12T15:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=816563"},"modified":"2025-03-12T17:07:32","modified_gmt":"2025-03-12T15:07:32","slug":"south-africa-has-7-9-million-taxpayers-funding-28-million-grant-recipients","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/816563\/south-africa-has-7-9-million-taxpayers-funding-28-million-grant-recipients\/","title":{"rendered":"South Africa has 7.9 million taxpayers funding 28 million grant recipients"},"content":{"rendered":"\n

The 2025 Budget revealed that South Africa\u2019s 7.9 million personal income taxpayers fund 28 million grant recipients.<\/p>\n\n\n\n

Finance Minister Enoch Godongwana delivered his 2025 Budget Speech in front of the National Assembly on Wednesday, 12 March 2025.<\/p>\n\n\n\n

Godongwana said the 2025 Budget aims to raise an additional R28 billion in 2025\/26 and R14.5 billion in 2026\/27.<\/p>\n\n\n\n

Most of this money will be raised through a 0.5 percentage point increase in value-added tax (VAT) and no increases in personal income tax brackets.<\/p>\n\n\n\n

There will also not be changes to medical tax credits. They will remain at R364 per month for the first two beneficiaries and R246 per month for the remaining beneficiaries.<\/p>\n\n\n\n

Not adjusting the tax brackets, rebates, and medical tax credits for inflation is expected to raise revenue of R19.5 billion.<\/p>\n\n\n\n

This means that South African personal income taxpayers will pay significantly more to the state in real terms.<\/p>\n\n\n\n

The reason for the higher taxes is South Africa\u2019s sluggish economic growth, which caused higher unemployment and citizens getting poorer.<\/p>\n\n\n\n

To address the pressure on poorer households, Godongwana significantly increased social grants, to which he allocated R284.7 billion.<\/p>\n\n\n\n

The old age and disability grants increased by R130 to R2,315, child support grants increased by R30 to R560 per month, and foster care grants rose by R70.<\/p>\n\n\n\n

The COVID-19 social relief of distress (SRD) grant, in its current form, will be extended by a year to end March 2026. R35.2 billion is allocated for this purpose.<\/p>\n\n\n\n

The finance minister said the social relief of distress grant will be used to introduce a sustainable form of income support for unemployed people.<\/p>\n\n\n\n

The future form and nature of the grant will be informed by the outcome of the review of active labour market programmes, expected to be completed by September 2025.<\/p>\n\n\n\n

Godongwana said nearly 28 million beneficiaries will access social grants. This is one of the most comprehensive social safety nets among emerging economies.<\/p>\n\n\n\n

\u201cThis reflects our commitment to addressing poverty and inequality while keeping our spending sustainable,\u201d he said.<\/p>\n\n\n\n

\"\"<\/a>
Finance Minister Enoch Godongwana <\/figcaption><\/figure>\n\n\n\n

7.9 million taxpayers funding 28 million grant recipients<\/h2>\n\n\n\n

Last month, President Cyril Ramaphosa praised the government\u2019s pro-poor policies in his State of the Nation Address (SONA).<\/p>\n\n\n\n

He celebrated the fact that more than 28 million South Africans receive monthly social grant payments.<\/p>\n\n\n\n

However, there is a challenge. Most of these people receive grants because they are unemployed and do not have a stable income.<\/p>\n\n\n\n

Instead of growing the economy and encouraging job creation through business-friendly policies, the government added more pressure on the very narrow tax base.<\/p>\n\n\n\n

The 2025 Budget revealed that the government will spend R422.3 billion on social development, with most of the money going towards grants.<\/p>\n\n\n\n

It will spend R117 billion on old-age grants, R100 billion on social security funds, R90 billion on child-support grants, and R77 billion on other grants.<\/p>\n\n\n\n

The 2025 Budget further revealed that South Africa only has 7.888 million personal income taxpayers, significantly less than the grant recipients.<\/p>\n\n\n\n

Even more concerning is that less than 1 million South Africans pay over 60% of personal income tax.<\/p>\n\n\n\n

These are the same people who own or run businesses, create employment, and ensure the South African economy grows.<\/p>\n\n\n\n

The government is now exerting tremendous pressure on this very narrow tax base, which is causing many to leave the country.<\/p>\n\n\n\n

\u201cMany rich and successful people are leaving South Africa. We are losing our taxpayers,\u201d renowned economist Dawie Roodt said.<\/p>\n\n\n\n

The situation is unsustainable, which is why Roodt and many other economists are calling on the government to focus on economic growth.<\/p>\n\n\n\n

Instead of celebrating the number of grant recipients, the government should focus on creating jobs and, therefore, more taxpayers.<\/p>\n\n\n\n

This is the only way South Africa will be able to address its large budget deficit, which includes R424.9 billion in annual debt-servicing costs.<\/p>\n\n\n\n

The table below shows the estimates of individuals and taxable income for the 2025\/26 financial year.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

The 2025 Budget revealed that South Africa\u2019s 7.9 million personal income taxpayers fund 28 million grant recipients. <\/p>\n","protected":false},"author":10,"featured_media":816639,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[21747,1293,17448,1647,21799],"class_list":["post-816563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-2025-budget-speech","tag-cyril-ramaphosa","tag-enoch-godongwana","tag-finance-minister","tag-finance-minister-enoch-godongwana"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816563","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=816563"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816563\/revisions"}],"predecessor-version":[{"id":816644,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/816563\/revisions\/816644"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/816639"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=816563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=816563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=816563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}