2025 Rates and Monetary Amounts and Amendment of Revenue Laws Bill (Rates Bill)
04 December 2025
The rates and monetary amounts, and amendment of the revenue bill, is an important tax policy instruments to give effect to the tax proposals tabled by the Minister in the Budget of 2025. Tax legislation is an important fiscal policy instrument to ensure our government is able to raise the required revenue to fund the functioning of the State and ensure the priorities of the Medium Term Development Plan are supported. Without adequate taxes collected, the country is left with no option but to consider various debt options to close the budget deficit, which impacts our overall debt position, which is exacerbated by an unjust financial sector architecture which is not designed to support emerging economies, particularly in Africa. This occurs through the imposition of high costs for debt, which crowd out public investment.
The recent G20 led by South Africa produced an important report on Public debts and inequality, which requires the world and our own country to reassess and review whether our taxation system is optimally taxing the top 10% who own a significant share of the economy. This minority owns significant assets, and others have high income, such as mining CEO’s who earn over 50 million annually. Asset and income inequality dictate that the tax system should also serve as a redistributive mechanism to realise the aspirations of humanity and our constitutional vision.
Inflation also has a significant impact on our budget, as a budget increase below the inflation rate is, in essence, a declining budget in real terms.
The bill before the house increases all transfer duty brackets by 10% and further makes an adjustment on the zero-rated threshold for the acquisition of residential property from R1.1 million to just over R1. 2 million, with all higher brackets and marginal rates adjusted accordingly. This will contribute to enhancing access to residential property, particularly for the middle strata and young families, lowering the cost of acquiring a home.
The ANC welcomes the extension of the Urban Development Zone Incentive by a further five years in order to stimulate inner city revitalisation programmes and to attract developments in urban areas. Over the period of 2012 and 2022, R2.7 billion in revenue was forgone, signifying that significant investments have been incentivised. To further enhance the incentive, the Committee recommended that the National Treasury undertake a comprehensive evaluation of the effectiveness of the scheme and its developmental impact, including on spatial transformation, affordable rental housing and small-business activity in inner-city areas. This is important not only to stimulate investment by major developers but also by emerging developers and enterprises in smaller cities and towns.
A key area that public stakeholders have raised relates to the impact of the illicit trade of alcohol and tobacco products due to the price competitiveness of illicit providers. Stakeholders and industrial players in the alcohol sector have raised concerns about above-inflation-rate increases, arguing that it makes alcohol beverages more expensive than illicit alcohol, thus enabling the illicit sector to flourish. This is a matter that requires continuous public consultation with the intention of having a balanced approach that enables the industry to be sustainable without exacerbating health risks. We believe law enforcement agencies have a key role to play in tackling illicit alcohol and goods in the economy, which leads to significant forgone taxation to the state. The ANC supports the call and recommendation by the committee for the introduction of a digital track-and-trace system for cigarettes and vaping products, and for a statutory minimum retail price mechanism for certain tobacco products and that the National Treasury and SARS report to the Committee on the feasibility, design options and potential revenue and compliance impact of such measures.
Another critical tax measure is the employment tax incentive increase, which is intended to maintain the real value of the incentive and to encourage the hiring and retention of young and low-wage workers in an environment of rising nominal wages. The employment tax results in a forgone tax above 6 billion annually, benefiting youth in the formal sector. Various research and empirical studies have argued that the incentive has not contributed to the intended objective of significantly reducing youth unemployment, which remains alarmingly high. This requires the National Treasury to continue assessing the robustness of the Employment Tax Incentive and ensure it is refined to increase employment opportunities by increasing the conditions of its benefit by linking it to an increase in additional employment by firms. This will also contribute to a skills revolution in the country. A massive employment programme is required at a firm level, and various employers have to develop growth and employment strategies as part of the incentivising system, to avoid incentives that are not adding adequate value to crowd in investment, leading to a benefit for employers without additional value extracted.
Honourable members, tackling the problem of unemployment requires a comprehensive interconnected approach by various role players such as the education sector, business sector and policy makers to ensure our economy is a fertile ground for innovation that will lead to the creation of job opportunities.
Through our tax system, a lot of possibilities exist to avail resources to respond to our developmental needs. The ANC calls on all social partners to further work with the government and participate in the National Dialogue to innovate solutions to respond to challenges impacting our country, and the tax system is a matter of national importance.
The ANC supports the bill