The National Treasury has reported told president Cyril Ramaphosa that South Africa will have to hike value-added tax (VAT) by 1% or 2% if it wants to keep the R350 Social Relief of Distress (SRD) grant going.
According to the Sunday Times, this message was among many delivered at a top-level meeting called by the president this week, following the release of a Treasury memo to various departments warning of budget cuts.
South Africa has effectively hit its budget limit, with revenues not meeting the February budget expectations, while government spending has continued to balloon far beyond what was planned. To avoid financial collapse, sacrifices now have to be made.
On top of proposals to freeze hiring and new projects, new cost-cutting measures that have emerged in Treasury’s plan reportedly include cutting down the number of departments in government.
This has been a long-held intention of president Cyril Ramaphosa, who promised back in 2018 to slim down his cabinet.
Ironically, the president introduced two new ministers this year instead.
Difficult choices
While there has been a clear focus on direct cost-cutting, austerity measures are not popular among politicians and put a severe strain on electioneering tools ahead of an important national election in 2024.
Ramaphosa hinted earlier this week that he was not in favour of budget cuts, saying that they were “not necessarily” the answer to South Africa’s financial woes.
However, he was reportedly told at this week’s meeting that huge trade-offs would have to be made somewhere.
For instance, if the government wants to keep the popular R350 SRD grant going, it will need to raise R42 billion or R55 million if it is raised to R450. This would require VAT to be hiked by 1% or 2%, respectively, the Sunday Times reported.
The SRD grant, initially implemented to offer some relief to the multitude of jobless South Africans impacted by the Covid-19 pandemic, has been extended several times.
The current end date of the grant is March 2024, but the political reality is that the grant has become a de facto basic income grant for the unemployed, with around 8 million recipients. To kill the grant would be an incredibly unpopular move a huge risk ahead of the 2024 elections.
But the budget shortfall won’t be solved by one or two measures, with the Sunday Times listing a host of social and other programmes that would need to be shut down to save money.
Government was warned
Finance Minister Enoch Godgonwana warned in May

that South Africa would need to make some significant trade-offs to address its fiscal challenges and restore public finances.
At the time, he warned that the ballooning government wage bill was the key concern.
Now, the Treasury sits with a much tighter budget, expanding government spending, and a growing debt problem where national debt is on track to hit R6 trillion by 2025.
Economist Dawie Roodt noted that the budget deficit is rooted in:
• The salary bill for civil servants being larger than budgeted because they received above-inflation increases. This is set to continue with an election year in 2024.
• The government gave more money to failing SOEs than expected. This will continue, especially with the state taking over a large part of Eskom’s debt.
• South Africa’s tax collections are under pressure because the economy is not growing.
• Income from mining is declining because of a downturn in the commodity cycle and problems with South Africa’s rail and port services.
“South Africa’s fiscal deficit for 2023 is set to be between 6% and 6.5% of gross domestic product (GDP), much higher than the minister’s expected 4%,” Roodt said.
He added that Godongwana said the government wants to stabilise South Africa’s debt level at 70% of GDP, but it has already increased to 72%.
The economist noted that the country only has four options to address the budget shortfall and the growing debt burdennone of which are easy or popular.
• Grow the economy. However, South Africa’s current macroeconomic policies will not lead to economic growth.
• Spend less money. However, spending less money on people is not politically palatable and, therefore, unlikely especially with elections around the corner in 2024.
• Increase taxes. However, the country already has an alarmingly narrow tax base, with 1.12% of taxpayers paying 30% of total personal income taxes and 4.4% of corporate taxpayers paying 95% of total corporate income taxes. If this increases, the tax base will collapse as many will simply leave.
• Privatise state-owned enterprises. The government can sell state-owned companies before they are worthless. However, this is also unlikely, as many public servants, unions, and politicians have a vested interest in SOEs. V.4978

One of the highlighted topics: Critical Skills Visa.

- Key Insight: Is your profession on the Critical Skills List? This visa is your fast track to working in South Afr...
- This matter relates to critical skills visa and its broader implications.
- Individuals are advised to seek professional guidance.

Is your profession on the Critical Skills List? This visa is your fast trac V.6139
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One of the applicants, Phindile Mazibuko, became a victim of identity theft in 2012 when fraudulent transactions occurred, using her personal details.

-The Pretoria High Court found that the department of home affairs had violated constitutional rights without due process.
-Only half of Lawyers for Human Rights` test group has been unblocked, while 385 000 identities remain blocked nationwide.
-LHR appeals extension, urges affected people to seek help now.

Lawyers for Human Rights (LHR) are intensifying pressure on the department of home affairs over the national ID-blocking crisis, accusing the state of acting too slowly to unblock qualifying individuals despite a landmark court ruling.

In January last year, the Pretoria High Court found that the department`s practice of blocking IDs without due process was unlawful and unconstitutional. One of the applicants, Phindile Mazibuko, a Swati citizen and South African permanent resident since 1998, fell victim to identity theft in 2012 when fraudsters used her personal details.

 V.6133
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The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.

What does this mean for travelers? V.6128
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The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.

What does this mean for travelers? V.6129
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A Washington state mother and her 6-year-old son have been released after spending more than three weeks in US immigration detention due to a brief trip to Canada and a small paperwork mistake, her attorney told CNN on Saturday.

Sarah Shaw, a New Zealand citizen who has lived legally in the US since she arrived in 2021, was detained at the Blaine, Washington, Customs and Border Protection checkpoint when returning home after dropping her two oldest children off at the Vancouver airport for a flight to visit their grandparents in New Zealand. Shaw, 33, chose the flight out of Vancouver because it was direct and she didn`t want her children to have to navigate a layover alone, her attorney Minda Thorward, told CNN.

 V.6130
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On 22 July 2025, the Gauteng High Court dismissed Sitrusrand Boerdery`s review of the Department of Employment and Labour`s refusal to issue a Working Conditions and Salary Benchmarking Certificate, an essential precondition for obtaining corporate visas under the Immigration Act.

Acting Judge Kekana AJ held that the Department`s decision was lawful, rational and procedurally fair. This judgment illustrates how businesses can - and must - structure their corporate visa applications to meet statutory requirements, and how legal practitioners should prepare robust review challenges when administrative authorities decline to recommend foreign-work permits.

 V.6131
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The United States could forfeit an estimated 9.4 billion dollars in visitor spending over the next three years following the introduction of a new 250 dollars `visa integrity fee,` according to industry groups, who warn the policy risks undermining tourism and costing thousands of jobs.
The United States’ decision to introduce a 250 dollars `visa integrity fee` on international visitors has triggered sharp criticism from the global tourism industry, with officials warning that the measure could deter millions of travellers and cost the U.S. economy billions.
The 250dollar `visa integrity fee,` part of the One Big Beautiful Bill Act signed on July 4, 2025, will take effect later this year. According to immigration law firm Envoy Global, it applies to all nonimmigrant visa holders which include students, tourists, temporary workers, and business visitors particularly from African countries. V.6132
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The Border Management Authority (BMA) has doubled its staff at Airports in South Africa , including immigration officers.

What does this mean for travelers? V.6127
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1. Right to Legal Representation•You have the right to consult with a legal representative.•Contact an immigration practitioner, legal aid clinic, or attorney urgently.•Do not sign any documents without understanding them fully. 2. Section 34 of the Immigration Act•You must be brought to court with 48 hours to confirm arrest but you can remain locked up very long as courts figure out what to do with you •If you`re found to be illegally in South Africa, you may be detained for up to 30 days (extendable by a magistrate) pending deportation.•BUT this cannot happen arbitrarily. You must be informed of your rights, and Home Affairs must follow due process.- becomes a nightmare , you could lose your job , business , place to stay V.6121
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Driving for Bolt, Uber, Mr D, or Checkers Sixty60?If you`re undocumented, you`re risking more than just your income.The Risks if You`re Not Legal: - Vehicle impoundment - Heavy fines - Arrest & deportation - Permanent bans from working in SA V.6122
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