Fiscal Framework and Revenue Proposals

The IEJ argues that South Africa's 2025 budget continues a pattern of fiscal consolidation and austerity that stifles economic growth and fails to meet constitutional obligations. The document criticizes the use of regressive tax measures, such as the general fuel levy increase and frozen personal income tax brackets, and highlights insufficient spending on healthcare, education, and social grants. It specifically calls for the expansion of the Social Relief of Distress (SRD) grant and a shift away from Public-Private Partnerships (PPPs) in infrastructure. The IEJ proposes alternative revenue sources, including increasing the Corporate Income Tax (CIT) rate to 28% and utilizing the Gold and Foreign Exchange Contingency Reserve Account (GFECRA), while recommending a more aggressive approach to debt management and wealth taxation.

• The current fiscal strategy focuses on reducing the debt-to-GDP ratio through higher primary surpluses and limiting non-interest spending, which the IEJ claims is irreconcilable with the mandate to realize socio-economic rights and spur growth.
• Public investment levels are insufficient to meet National Development Plan targets; the R1 trillion provided over the medium term falls short of the estimated R800 billion per year required to reach an investment target of 10% of GDP.
• Proposed tax measures, including freezing personal income tax (PIT) brackets and increasing the general fuel levy, are viewed as regressive, disproportionately burdening low- and middle-income earners.
• Social grant allocations are inadequate, with the Child Support Grant (R560) and the Social Relief of Distress (SRD) grant (R370) both remaining below the Food Poverty Line (FPL) of R796.
• The government's reliance on Public-Private Partnerships (PPPs) and 'de-risking' for renewable energy from independent power producers (IPPs) has created contingent liabilities of R229.5 billion while IPPs provide less than 10% of consumed electricity.
• The IEJ suggests alternative revenue and debt strategies, such as restoring the Corporate Income Tax (CIT) rate to 28%, removing retirement fund tax deductions for those earning over R1 million, and drawing from the GFECRA, which has a surplus of R140 billion above the SARB and National Treasury buffer.

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} }