On 24 March, 2025, PwC South Africa publicised its latest report Budget 2025: Responsible growth for a sustainable future delving into various perspectives on the current state and future outlook of South Africa’s fiscal policies, economic growth strategies and infrastructure development.
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The company says, “Recent announcements in the Budget Speech 2025, including the increase in the Value-Added Tax (VAT) rate, have sparked discussions about the best fiscal choices for South Africa’s future. In the report, we further reflect on the broader context of South Africa’s tax increase choices, levers to improve economic growth and the need for climate-resilient infrastructure.”
Key areas of focus:
- Collecting taxes, fairly: South Africa is in search of ways to shore up its revenues towards reducing the fiscal deficit today and, over time, reduce its debt burden. There are, of course, myriad ways that this can be achieved, both from a theoretical and practical perspective. In addition to the announced increase in VAT, PwC South Africa considers two other options available over the medium term that put more than R100-billion per annum on the table.
- Growing the economy to create more tax revenue: South Africa’s private sector has in recent years forged strong cooperative relationships with the government in support of enabling key reforms in critical bottlenecks for economic growth. Work in energy, transport and logistics, and crime and corruption have had some positive results, though as the meagre economic growth numbers for 2023-2024 show, much work still needs to be done.
- Climate-resilient infrastructure: While South Africa wants to increase funding for climate-resilient infrastructure, the fiscus cannot afford to financially support the amount of investment that is required.
Access the report here: https://www.pwc.co.za/en/assets/pdf/budget-2025.pdf
Source: supplied by PwC South Africa