OUTA formally objected to Treasury’s Budget 2025 proposals to increase VAT and freeze tax brackets, and offered practical solutions to save money.

In a formal submission to Parliament, OUTA has formally objected to additional proposals that would unfairly burden South Africa’s already overstretched tax base, while the government continues to overlook the urgent need to address corruption, waste, and inefficiency.

Our submission warns that tax bracket creep has silently drained taxpayers’ pockets for over a decade. Since 2012, Treasury has under-adjusted tax brackets in 11 of 14 years, costing taxpayers 26 percentage points due to inflation. If you earn around R350 000 a year, this means that you paid over R85 000 in extra taxes, according to Wayne Duvenage, OUTA’s. While taxes increased, service delivery declined.

As if this is not enough, South Africans are faced with a VAT increase by 0.5 percentage points in 2025/26 and another 0.5 points in 2026/27, raising the VAT rate to 16%. This will deepen inequality, placing a disproportionate burden on low- and middle-income households, while negatively impacting employment and business investment in South Africa.

Here are some of our practical, actionable proposals that can help fix the fiscal crisis.

• Pursue the 100 000 millionaires evading tax: SARS says they lose R100 billion in revenue.

• Illicit trade bleeds R30 billion: Tobacco and alcohol smuggling drain public funds.

• R200 billion is lost annually to corruption and waste, as estimated by the Auditor-General and other independent bodies. 

• Downsize the bloated Cabinet:  We don’t need 75 ministers and deputies. They cost taxpayers millions.

• VIP protection costs R3.9 billion a year: Cutting excess could save nearly R1 billion, which can be redirected to key public services like the NPA, Hawks, and Special Investigating Unit.

• Reduce state-owned entities:  This increased from 100 to 279 in 20 years. We recommend the selling of non-core SOEs, which will significantly reduce liabilities.

• OUTA calls for legislative changes to let Treasury cut SDL levies, reallocate funds, or reduce national debt. In 2024, OUTA uncovered R55.5 billion in surpluses across 26 Higher Education entities. Other departments likely hold similar excess funds. 

• Review government leases: Many government departments continue to pay inflated lease rates. 

• Cut the many overpaid, ineffective board members draining SOEs: Entities like ATNS, ACSA, Sanral, SETAs, and NSFAS have failed to oversee financial management, allowing mismanagement to persist unchecked. 

Read our press release here. 

Our submission to the Standing and Select Committees on Finance is available here.