The draft legislation would require governments to set and report against their own fiscal objectives, with Parliament and the Financial and Fiscal Commission given stronger oversight roles.
Stronger tax collections give Treasury room for additional spending and temporary fuel relief, but fading commodity gains and high debt-service costs constrain the outlook.
The MPC’s first rate cut in months underscores the SARB’s view that a lower target can support a gradual easing cycle.
The MTBPS raises the 2025/26 gross revenue estimate by R19.7bn but warns of a R15.7bn shortfall against Budget estimates for 2026/27.
Godongwana announces a shift from the 3%-to-6% range to a 3% target with a 1-percentage-point tolerance band, to be implemented over two years.
MPs are also told that the fiscus cannot afford a permanent and expanded Social Relief of Distress grant without tax increases.
The MTBPS shows tax revenue will be below the Budget estimates, but SARS is adamant it will do everything in its power to collect as much money as it can.
The Medium-Term Budget Policy Statement reveals a budget surplus and reduced wage bill, but it warns of ongoing financial pressures due to modest economic growth projections.
