Budget 2023: Commodity Boom delivers R300bn windfall for SA taxpayers

By Alec Hogg

While many South Africans are morally outraged at Russian president Vladimir Putin’s invasion of neighbouring Ukraine, this particularly ill wind has certainly blown well for those who pay taxes.

The buoyancy of commodity prices – a direct consequence of the Ukraine War – has made a huge difference to SA’s financial position. In the fiscal year to the end of February, Treasury will receive a hefty R94bn more tax revenue than expected a year ago. 

Treasury expects this windfall to continue this year and next, providing R200bn more to the national coffers than the three-year projection made in February last year. The table below outlines the significance.


This unexpected bonus has given finance minister Enoch Godongwana the room to pass along an effective R26bn tax relief in the 2023 Budget.

The bulk of this is via the inflation-related adjustment to the personal income tax tables, which increases the levels for the marginal tax to combat what economists call Fiscal Drag. 

Although such adjustments to the tax tables simply neutralise the impact of price increases in the economy, adjustments for fiscal drag are never guaranteed in South Africa. Merely leaving the tax tables as they were would have generated an extra R15.7bn for the government.

A similar benefit, of R4bn this time, accrues from the second successive year of no increase to fuel levies – which means the taxman takes the inflation hit.

The other R9bn in tax relief is directly related to the electricity supply crisis through incentives for households to instal rooftop solar (R4bn) and an extension of the incentive for corporates to invest in renewable energy (R5bn).


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