Fiscal Framework and Revenue Proposals

The Institute for Economic Justice (IEJ) submitted a critique of the 2025 National Budget's fiscal framework and revenue proposals to the Finance Standing Committee on 26 May 2025. The IEJ argues that the National Treasury's strategy of fiscal consolidation and debt reduction undermines inclusive growth and socio-economic rights. The report recommends shifting from regressive tax measures, such as the general fuel levy, toward progressive wealth and corporate taxes, while increasing spending on social grants and public infrastructure to meet constitutional obligations.

• The IEJ argues that the National Treasury's current fiscal strategy is incompatible with the government's mandate to promote economic growth and socio-economic rights. This strategy relies on limiting non-interest spending to tax revenues, increasing primary surpluses, and a passive approach to revenue mobilisation.
• Public investment levels are insufficient to meet the National Development Plan (NDP) target of 10% of GDP. The R1 trillion provided over the medium term is significantly lower than the estimated R800 billion per year required to reach that target.
• The IEJ criticizes proposed revenue measures as regressive, specifically the freeze on personal income tax (PIT) brackets and the increase in the general fuel levy. These measures are expected to disproportionately burden low- and middle-income households, with the fuel levy increase potentially having the same distributional impact as a VAT hike.
• The report highlights a lack of adequate funding for social grants. The Child Support Grant (R560) and the Social Relief of Distress (SRD) grant (R370) both remain below the Food Poverty Line (FPL) of R796. Additionally, the IEJ warns against National Treasury's attempts to attach conditions to the SASSA budget, which could exclude millions of recipients.
• The IEJ opposes the use of Public-Private Partnerships (PPPs) and 'de-risking' mechanisms for infrastructure and energy. It notes that 'de-risking' for independent power producers (IPPs) has created contingent liabilities of R229.5 billion, while IPPs provide less than 10% of consumed electricity.
• To fill revenue gaps without burdening the poor, the IEJ proposes several alternatives: drawing from the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), which is R140 billion above the recommended buffer; restoring the Corporate Income Tax (CIT) rate to 28%; and removing retirement fund tax deductions for those earning over R1 million.

APA

Institute for Economic Justice (2025). Fiscal Framework and Revenue Proposals. https://iej.org.za/wp-content/uploads/2025/05/3.0-Fiscal-Framework-and-Revenue-Proposals-Submission-_-Budget-2025.pdf

Chicago

Institute for Economic Justice. Fiscal Framework and Revenue Proposals. 2025. https://iej.org.za/wp-content/uploads/2025/05/3.0-Fiscal-Framework-and-Revenue-Proposals-Submission-_-Budget-2025.pdf.

Wikipedia

{{cite report |author=Institute for Economic Justice |title=Fiscal Framework and Revenue Proposals |date=26 May 2025 |url=https://iej.org.za/wp-content/uploads/2025/05/3.0-Fiscal-Framework-and-Revenue-Proposals-Submission-_-Budget-2025.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{instituteforeconomicjustice2025fiscal, author = {{Institute for Economic Justice}}, title = {{Fiscal Framework and Revenue Proposals}}, institution = {Institute for Economic Justice}, year = {2025}, month = may, url = {https://iej.org.za/wp-content/uploads/2025/05/3.0-Fiscal-Framework-and-Revenue-Proposals-Submission-_-Budget-2025.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }