Investment in Green Growth and Manufacturing Incentives
In SONA 2026, President Ramaphosa highlighted the shift towards green growth and industrial development, signalling major opportunities for investors and businesses. Government plans include new tax incentives, such as a 150 percent tax deduction for investments in new energy vehicles and battery production. This means companies investing in clean energy manufacturing can claim a larger deduction than the actual investment, making capital spending more tax-efficient. International financing through the Just Energy Transition Investment Plan is also expected to support this shift.
This type of incentive aims to boost local manufacturing, attract capital, and create jobs, particularly in sectors connected to renewable energy, chemicals, steel and critical minerals. It also strengthens South Africa’s positioning in global supply chains where sustainability is becoming a competitive requirement.
Focus on Critical Minerals and Strategic Industries
The address pointed out South Africa’s massive critical minerals reserves, valued in the trillions. Government announced plans to invest in geological mapping and exploration funding to unlock these resources, making mining a “sunrise industry” for economic growth and export revenue.
This creates opportunities for businesses in mining services, technology, logistics and equipment supply. Companies that can offer geological tech, exploration software, automation or risk-management solutions might find new demand as investment in exploration expands.
Energy and Infrastructure Reforms with Private Sector Participation
SONA 2026 included comprehensive plans to reform South Africa’s energy and transport infrastructure. Government intends to establish an independent transmission company and open electricity transmission to private investment to reduce reliance on a single supplier and accelerate grid capacity expansion.
Reforms in rail and ports using public-private partnership (PPP) models are also expected. These initiatives invite private partnerships to help improve logistics, reduce costs for manufacturers and exporters, and modernise infrastructure that supports business growth.
Tax and Compliance Measures Affecting Businesses
While SONA itself did not announce new taxes, the broader fiscal framework tied to the 2025/26 budget proposals includes important tax changes that affect businesses in 2026:
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VAT Rate Adjustments: Government has proposed increases that would raise the VAT rate to 16 percent in the 2026/27 fiscal year, which affects consumer costs and business input pricing. (Government of South Africa)
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No inflation adjustment for tax brackets and rebates: This increases the effective tax burden over time, a factor businesses and employees must consider in financial planning. (Government of South Africa)
Businesses should prepare for these changes in pricing, cash-flow forecasting, and customer demand planning.
Support for Small, Medium and Micro Enterprises (SMMEs)
Although specific new SMME policies were not detailed in SONA itself, expert and business organisation commentary before the speech emphasised the need for tangible support for micro, small and medium enterprises. Organisations like Property Point have urged government to prioritise creating an enabling environment through practical policy execution, easier access to finance, and reduction of bureaucratic barriers.
Small businesses are a backbone of the economy, contributing around 34 percent of GDP and employing about 60 percent of the workforce in South Africa. SARS continues to improve taxpayer services and compliance support for SMMEs, including things like Turnover Tax options and simplified registrations. (South African Revenue Service)
What It Means for Business Planning in 2026
Taken together, the SONA 2026 policy direction suggests several business priorities:
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Focus on green manufacturing and energy-related opportunities that come with tax incentives and investment interest.
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Prepare for regulatory and fiscal changes that affect cost structures, especially VAT and tax compliance.
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Consider participation in infrastructure and logistics projects under PPP frameworks.
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Small and medium enterprises should engage with available tax regimes like turnover tax and look for compliance support offered by SARS. (South African Revenue Service)
This mix of incentives, reforms, and fiscal planning shows government is signalling confidence in growth through private sector participation, but execution and detail will be key as the year unfolds.
