South Africa

Individual - Significant developments

Last reviewed - 12 December 2025

The most significant recent changes impacting the taxation of individuals in South Africa are as follows:

Government formally withdrew the ZAR 20 billion tax increases for 2026 that had been proposed in Budget 2025, citing the improved fiscal outlook reflected in Budget 2026. Accordingly, no new tax hikes were introduced for the 2026/27 year of assessment.
For the first time since 2023, the Budget introduced inflationary adjustments in respect of personal income taxes. These adjustments include increases to the personal income tax brackets, rebates and tax thresholds in line with the inflation forecast of 3.4% for the 2026/27 year of assessment, together with corresponding increases to the medical scheme fees tax credits.
Budget 2026 also strengthened incentives for long‑term saving. The annual deduction limit for retirement fund contributions increased to ZAR 430,000. In parallel, the annual contribution limit for tax‑free savings accounts increased to ZAR 46,000.

Budget 2025 proposed to remove the exemption that allows South African tax residents to exclude certain foreign retirement benefits, such as lump sums and pensions, from local taxation when earned for past employment abroad. Draft legislation was issued to give effect to this proposal but was subsequently withdrawn. The National Treasury has indicated that the matter will be revisited.
From 1 March 2024, to the extent that a non-resident beneficiary has or obtains a vested right to the income received by / accrued to a South African resident trust, the trust will be treated as fiscally opaque, i.e. the trust (instead of the non-resident beneficiary) will be taxed on the income.