“An agreement that will really change the world.” (Olaf Scholz, former German Finance Minister)
| In October 2021, a global minimum tax framework for large multinational enterprises (MNEs) was established with the introduction of the GloBE (Global Anti-Base Erosion) model rules by the OECD (Organisation for Economic Cooperation and Development).
These rules address profit shifting by multinational groups to low- or no-tax jurisdictions and ensure a minimum level of tax is paid on income in every jurisdiction in which MNEs operate. South Africa enacted the GloBE minimum tax legislation in 2024 and 2025, enabling SARS to impose a multinational top-up tax at a rate of 15% on the excess profits of affected MNE Groups. This tax effectively brings the overall taxation of foreign profits up to a minimum agreed level of 15%, where those profits have been subject to little or no tax offshore. As such, the GMT is expected to generate significant additional tax revenues by curbing tax avoidance, ensuring multinational corporations contribute their fair share of taxes, and extending the country’s tax base. The GMT is expected to raise an estimated R2 billion in South African tax revenues. The broadened tax base will open opportunities to lower the personal income tax burden on individuals, or to consider more globally competitive corporate tax rates than the current 27%, which is well above the international average. Which companies are directly affected?
The GloBE Rules apply to MNE Groups whose consolidated annual revenues equal or exceed EUR 750 million in at least two of the tax years immediately preceding the reporting fiscal year. GMT deadlinesThe local legislation governing GMT is deemed to have come into operation on 1 January 2024 and applies to MNEs’ subsequent “fiscal years”. Here are the deadline dates as published by SARS.
Source: SARS How will the tax be calculated?
Registration and reporting obligations
SARS is ready: Are you?SARS is actively preparing to administer the GloBE framework, with a dedicated project team, including IT and system engineers, and a specialised unit within its Large Business & International Unit. It aims to promote voluntary compliance and simplify adherence with the GMT legislation. Even so, a significant compliance burden and increased reporting scrutiny awaits affected companies. They will have to comply with new and technically demanding rules, even if no global minimum tax is ultimately payable. This will likely require specialist expertise, resulting in substantial additional compliance costs. |
“Renette Oosthuizen, small business owner from Gauteng, had this tip: ‘Minister Godongwana, please increase the VAT registration threshold for small businesses to R2 million. The R1 million threshold has not kept pace with the cost of doing business.’” (Budget Speech 2026)
Some of the best news in the 2026 Budget is the proposed increases in the compulsory VAT registration threshold from R1 million to R2.3 million and in the voluntary registration threshold from R50,000 to R120,000, with effect from 1 April 2026.
This will immediately ease the disproportionate administrative burden and compliance cost on small businesses which would have had to register soon. What’s more, VAT registered businesses may apply to deregister for VAT if they no longer exceed the increased compulsory registration threshold on 1 April 2026.
Deregistering for VAT can improve cash flow. But it’s a decision that should not be taken without consulting us, as it can trigger substantial adverse tax consequences that might well convince you not to deregister.
The compulsory registration threshold had not been adjusted for inflation since 2009. The new R2.3 million threshold, which slightly outstrips inflation, will ease the previously disproportionate compliance burden relative to turnover on smaller businesses. It may also spur unrestrained growth among many small businesses which felt forced to contain themselves to avoid the VAT net and its never-ending impact on admin and cashflow.
Given the above, many small businesses will be keen to deregister for VAT. The good news is that it is possible for VAT registration to be cancelled – provided certain requirements are met. The first is that all outstanding liabilities and obligations in terms of the VAT Act have been resolved or settled.
The Commissioner will issue a notice of cancellation of registration which will also inform the vendor of the date on which the cancellation takes effect and the final VAT period.
SARS says output VAT on certain assets on hand at the time must also be declared together with any other output tax and input tax in the VAT return for that final tax period. In other words, you must declare the amount of output VAT on the value of the business’ assets at the date of deregistration and pay this over to SARS.
There is also a general unpaid-creditor claw-back provision that requires a vendor to reverse previously claimed input VAT by accounting for output VAT on amounts due to creditors but not paid within 12 months of the date they became payable. This rule applies throughout the VAT registration period but is also triggered immediately before a vendor ceases to be registered.
Commonly referred to as “exit VAT”, this can cause immediate and possibly substantial financial implications that could strain your cashflow.
If you are interested in deregistering for VAT, we urge you to speak to us to ensure you fully understand the financial implications and can carefully plan the timing to avoid tax surprises and cash flow problems.
“Great things in business are never done by one person; they’re done by a team of people.” (Steve Jobs)
As a small business owner, every rand you spend needs to return value, and your team building events are no exception. When structured properly, team building days can align your staff around shared goals, strengthen communication, and clarify behavioural expectations. They will improve output, reduce internal conflict, and build a culture that supports growth. But just how do you make that happen?
Before choosing a venue or activity, be clear on what you want to change or improve. Are teams struggling to communicate across departments? Is accountability an issue? Are managers and staff misaligned on priorities? Defining these objectives upfront ensures the day is purposeful rather than generic.
Clear objectives also help you explain to your team why the event matters. When people understand the business reason behind the activity, engagement increases and resistance decreases.
The most effective team building events mirror the reality of your workplace. Activities should encourage collaboration, problem-solving, and decision-making in ways that resemble everyday business situations. When lessons feel relevant, they are much more likely to stick.
Avoid activities that are purely physical or novelty-driven if they don’t translate back to the office. Fun has value, especially when it supports insight and learning.
One of the most overlooked elements of team building is reflection. Doing the activity isn’t enough. Teams need time to discuss what happened, what worked, what didn’t, and how it relates to their daily roles. These conversations can lead to real insights. They also help teams to agree on practical changes they can make once they return to work.
It’s vital that all members of the team feel safe to speak up, ask questions and make mistakes without fear of retribution or punishment. By making sure all voices are heard on something small like losing at tug-of-war, you can reinforce that attitude in the day-to-day office space and equip your teams to perform at their best.
Team building will only succeed if leaders model the behaviours being promoted. If collaboration, accountability, and open communication are encouraged on the day but ignored afterwards, the impact quickly fades. As a business owner or manager, you should participate fully, demonstrate vulnerability where appropriate, and reinforce lessons in the weeks that follow.
Effective team building does not end when everyone goes home. Follow-up meetings, check-ins, and ongoing conversations are essential to embed new behaviours. Refer back to shared experiences and agreed principles when challenges arise.
As with any business initiative, cost matters. Team building exercises should be planned within a clear budget, and with a realistic view of expected outcomes. Your accountant can help you structure this spend appropriately, ensure tax considerations are handled correctly, and assess whether the investment delivers measurable returns.
Reduced absenteeism, improved productivity, and stronger retention are all indicators worth tracking. If you’re unsure how to measure impact, speak to your accountant: we can help you to access the data you need.
Team building that works is intentional, relevant, and accountable. It focuses on behaviour, not just morale, and it connects people more closely to the goals of your business. When done properly, it strengthens both culture and performance.
For small business owners, the key is to treat team building with the same seriousness as any other investment. Plan carefully, follow up consistently, and involve your accountant where appropriate to ensure that what you spend delivers lasting value, not just a good day out.
“As your profitability grows, your taxes will too. In fact, paying more taxes is an indicator that your business health is improving.” (Mike Michalowicz)
Business owners work hard to grow revenue and increase profit. What often receives less attention is how that growth alters your tax obligations. Higher turnover can trigger VAT registration. Rising profit increases provisional tax exposure. Hiring staff adds payroll compliance risk. Expansion across borders introduces new tax jurisdictions. Even improved margins can create cash flow pressure when tax payments are due before debtors settle their accounts.
In South Africa, once your taxable supplies exceed the compulsory registration threshold (recently increased from R1 million per year to R2.3 million per year), you must register for VAT. Many businesses grow quickly and miss the moment they cross it. This simple mistake can trigger penalties, interest, and backdated VAT.
Cash flow can become a second issue. You collect VAT on sales, but input VAT claims lag if suppliers don’t issue proper invoices. If you price incorrectly, you may end up funding VAT from your own margin. You might even have to pay output VAT on sales before you have received payment from your debtors.
Growth often means higher transaction volume as well. That increases the risk of errors in VAT coding, zero-rated supplies, and mixed-use expenses. It’s easy to see how a small bookkeeping mistake can easily become a material tax exposure.
Of course, there can also be benefits to registering for VAT, not least the potential right to claim input VAT on certain assets that have been purchased before you registered for VAT, and that are now used to make taxable supplies. VAT must however have been charged at the time of purchase. This can provide a nice inflow of cash, if handled correctly. Bottom line: speak to your accountant!
When profit rises, so does income tax. Owners often draw more cash as profits rise. They forget that tax on those profits has not yet been paid, and by the time the assessment arrives, the money is gone.
Provisional tax can be particularly problematic. Estimates based on last year’s lower profits lead to underpayment penalties when actual results are filed. Rapid growth can produce a large balancing payment in the second provisional period, or at year end.
Hiring staff is a sign of progress. It also triggers pay-as-you-earn (PAYE), unemployment insurance fund (UIF), and skills development levy (SDL) obligations. Errors in payroll setup multiply as your headcount increases. If payroll software isn’t configured correctly, you can under-deduct PAYE. Add penalties and interest, and growth in staff numbers can become a financial setback.
Share incentive schemes and other fringe benefits introduce potential tax complications. Without guidance, these benefits can be structured in ways that create unexpected tax costs for both employer and employee.
Sometimes growth means selling beyond South Africa’s borders. Cross-border trade brings customs duties, foreign VAT, transfer pricing, and double taxation agreements into play.
A small e-commerce business that starts shipping internationally may create a permanent establishment in another jurisdiction without even realising it. That can expose them to foreign corporate tax. Currency gains and losses add volatility. If not monitored carefully, taxable income can rise even when cash flow does not.
The structure that worked at start-up may not suit a larger business. A sole proprietorship with modest turnover may be efficient. The same structure with higher profit can push you into a steeper marginal tax bracket.
When investors buy into new structures, share issues and valuations may raise capital gains tax and income tax questions if roll-over relief is not available. Growth may also expose structural weaknesses. Dividends tax and loans between shareholders and companies can create further tax considerations.
Expanding operations usually requires additional equipment, vehicles, or property. Tax deductions for capital assets now need to be considered. Meanwhile, disposal of older equipment may trigger recoupments or capital gains taxes. A growing business that upgrades assets frequently should definitely model the tax impact of these upgrades before committing.
Rapid growth often ties cash up in stock and debtors. Profit on paper doesn’t mean cash in the bank. Tax is calculated on taxable income, not on what clients have paid. What this all means is that a business can show strong profit, and owe tax on that profit, but still struggle to pay tax because of cash flow issues. Cash flow forecasting must include tax forecasting.
As turnover grows, so does visibility. Larger payrolls, higher VAT submissions, and bigger provisional payments attract scrutiny. Inaccurate returns that went unnoticed at a small scale can become costly when the numbers are larger.
Internal controls that were informal at start-up stage now need formal processes. Documentation matters. Contracts, invoices, and board resolutions must support your tax position. Without them, assessments become difficult to dispute.
Growth doesn’t create tax problems on its own. Lack of planning does.
Review your tax registrations before revenue spikes, update provisional tax estimates during the year, and align owner withdrawals with after-tax profit, not turnover. It’s also important that you reassess your entity structure as profit bands change, and model the tax impact of hiring, investing, or expanding offshore before you act.
Growth is a good problem to have. But it is still a problem if ignored. Engage your accountant early in the growth phase, not after the assessment arrives.
The 2026 Budget marks an important turning point for South Africa.” (Dr Duncan Pieterse, Director-General, National Treasury)
Some of the best news in Budget 2026 is the real GDP growth of an estimated 1.4% for 2025, rising to 2% in 2028, and a debt ratio that will stabilise during this financial year and decline thereafter.
Inflation also declined to 3.2% in 2025 (from 4.4% in 2024), improving affordability for households and keeping interest rates down. At the same time, growth-enhancing reforms have progressed and confidence in South Africa’s fiscal outlook has improved, enabling a sovereign ratings upgrade and lower borrowing costs.
Against this backdrop, government has withdrawn the R20 billion tax increases it had planned for this budget and instead proposes inflationary relief for taxpayers.
This means no increase in VAT and no increase in income tax for individual or corporate taxpayers.
After two years with no inflationary relief, personal income tax brackets and medical tax credits are fully adjusted for inflation.
The tax threshold for individuals below age 65 is now R99 000, and medical tax credits will increase from R364 to R376 for the first two members, and from R246 to R254 for additional members.
Bottom line: taxpayers will keep more of their income in real terms than in the previous two years.
In addition, limits, rebates and duties are also inflation-adjusted for contributions to tax-free investments, the retirement funds deduction cap and capital gains tax (CGT) exclusions.
An increase in the annual tax-free savings account contribution limit to R46 000 (from R36 000) and the limit to retirement fund deductions from R350 000 to R430 000 are encouraging South Africans to save more.
The Budget also proposes increasing the annual exclusion on capital gains tax from R40 000 to R50 000 for individuals and special trusts, and the annual exclusion for individuals in the year of death from R300 000 to R440 000.
The exclusion that applies on the disposal of a primary residence will increase from R2 million to R3 million. Very good news for anyone planning on selling their home.
The corporate tax rate remains unchanged at 27%. The global minimum tax rules will be implemented in 2026/27, a move expected to raise around R2 billion (down from an earlier estimate of R8 billion) by reducing profit shifting by multinationals.
More good news for businesses, especially small companies, is the increase in the VAT registration threshold to R2.3 million (previously R1 million), effective from 1 April 2026.
In addition, asset disposals by small businesses of as much as R15 million will be exempt from capital gains tax, a 50% increase on the current limit.
The annual turnover limit for turnover tax is also adjusted for inflation (from R1 million to R2.3 million). In addition, the restriction on tax year end dates will be removed to make the turnover tax regime more attractive.
A proposed review of the urban development zone tax incentive will explore better support for affordable housing developments in urban areas.
Alcohol, tobacco, and vaping excise duties already increased in line with inflation (3.4%), effective 25 February.
Under consideration is a national online gambling tax, proposed at 20% on gross revenue, for further consultation during 2026.
The customs and excise levies on fuel remain unchanged but fuel levies have increased, with the general, Road Accident Fund and carbon tax levies up for both petrol and diesel from 1 April.
Local investors diversifying offshore will appreciate the increase in the single discretionary allowance (SDA) for individuals from R1 million to R2 million per calendar year.
The Budget also proposes that investment returns generated by regular collective investment schemes (CIS) and retail investment hedge funds be taxed as capital, to encourage savings and to provide the industry with tax certainty
Artificial intelligence and generative AI may be the most important technology of any lifetime.” (Marc Benioff, CEO, Salesforce)
Traditional accounting involves a great deal of manual processing, endless menial tasks, and plenty of opportunities for mistakes and typos – all of which can mean long waiting periods for financial reports that are crucial for decision-making.
AI is changing this through advanced technologies like machine learning, natural language processing, generative AI, and intelligent automation. It can streamline accounting and finance processes, reduce human error, and empower you to make real-time data-driven decisions with greater certainty.
Many proactive businesses are already experiencing the benefits of integrating AI into their bookkeeping and accounting workflows.
By embracing AI-driven tools, businesses can streamline financial operations, improve accuracy and decision-making, reduce costs and risks and gain a competitive edge in today’s digital economy.
If your current in-house processes still rely heavily on manual grunt work, it may be time to explore AI-enabled alternatives.
A good starting point would be to identify repetitive tasks like manual data entry or document chasing that delay your accounting processes. Start with one specific workflow: let’s say, Accounts Payable automation, training staff to shift from doing the work to reviewing the AI-generated outputs and managing any exceptions. Once you’ve got that waxed, you can start overhauling other processes.
Experts widely agree that AI is extremely unlikely to replace accounting professionals, whether working in companies or in advisory firms. However, AI does offer great potential to transform accounting roles by automating routine tasks for enhanced efficiency and accuracy, and by enhancing analysis and decision-making capabilities.
Budget 2026 has brought long-overdue relief to taxpayers by not imposing VAT or income tax hikes and by adjusting the tables for tax rates, rebates and credits for inflation. Of course, some tax hikes were always going to happen: inflation-linked increases on sin taxes took effect on 25 February already and the fuel levies also increased.
This selection of official SARS Tax Tables and other useful resources will help clarify your tax position for the new tax year. Then follow the link to Fin 24’s Budget Calculator (just follow the four-step process) to do your own calculation.
Source: National Treasury
Source: National Treasury
Source: National Treasury
Source: National Treasury
Source: 2026 SARS Budget Guide
Use Fin 24’s four-step Budget Calculator here to find out the monthly and annual impact on your income tax, as well as what you will pay in terms of fuel and sin taxes.
Never take your eyes off the cash flow because it’s the lifeblood of business.” (Richard Branson)
Ask any business analyst about recurring cash flow challenges and you’ll often hear them say, “It’s not that the business is short of money, it’s that money arrives too late or not at all.” Behind every late payment sits a human choice: a decision to delay invoicing, skip a follow-up call or assume a client will “get around to it.” These decisions aren’t random; they reflect habits and beliefs about confrontation, courtesy, and priorities.
Over time, the cost of these habits shows up in your bank account, your stress levels, and your ability to invest in growth. Changing your behaviours can change your cash flow trajectory. Here’s a breakdown of the common behavioural issues that silently undermine cash flow:
Now that you’ve identified the challenges, here’s what you can do about them.
Cash flow is as much a reflection of your behaviour as it is of your success. Every invoice you send promptly, every follow-up you make professionally, and every firm but fair payment term you enforce tells your business and your clients how you value time, expertise and partnership.
Start treating your cash flow as a behavioural challenge, not just a financial one, and you’ll build a stronger foundation for sustainable growth.
