South Africa’s 7.9 million personal income taxpayers fund 28 million grant recipients, according to the 2025 Budget.
Finance Minister Enoch Godongwana said the 2025 Budget aims to raise an additional R28 billion in 2025/26 and R14.5 billion in 2026/27 for social grants, BusinessTech reports.
Most of this money will be raised through a 0.5 percentage point increase in value-added tax (VAT).
Godongwana significantly increased the value of social grants, to which he allocated R284.7 billion.
The old age and disability grants increased by R130 per month, child support grants increased by R30 per month, and foster care grants rose by R70.
The Covid-19 Social Relief of Distress (SRD) grant will be extended to the end of March 2026. R35.2 billion is allocated for this purpose.
Godongwana says that the SRD grant will essentially become a basic income grant for unemployed people.
Nearly 28 million beneficiaries will access social grants.
“This reflects our commitment to addressing poverty and inequality while keeping our spending sustainable,” he said.
President Cyril Ramaphosa, in his State of the Nation Address, celebrated the fact that more than 28 million South Africans receive social grants. The government has now added pressure to a very narrow tax base.
South Africa only has 7.9 million personal income taxpayers, compared to 28 million grant recipients.
Less than 1 million South Africans pay over 60% of personal income tax.
“Many rich and successful people are leaving South Africa. We are losing our taxpayers,” renowned economist Dawie Roodt said.
[Image: Frantisek Krejci from Pixabay]