South Africa has ushered in 2025 with two heavyweight laws set to make waves: the Global Minimum Tax Act and the Employment Equity Amendment Act (EEA). While one targets multinational giants and tax loopholes, the other seeks to promote diversity and fairness in the workplace. Here’s a breakdown of what these laws mean for you, your business, and South Africa.

Taxing the giants: Global Minimum Tax Act

It’s no secret that multinational corporations have long played a game of hide-and-seek with their profits, shifting earnings to low-tax havens while countries like South Africa lose out. Enter the Global Minimum Tax Act, signed by President Cyril Ramaphosa on Christmas Eve last year and backdated to take effect from January 1, 2024.

This law enforces a 15% minimum effective tax rate on the foreign income of multinational enterprises (MNEs) with annual global turnover exceeding €750 million (about R15.3 billion). It’s part of a global movement spearheaded by the Organisation for Economic Co-operation and Development and G20 group to level the tax playing field.

In his 2024 Budget Speech Finance Minister Enoch Godongwana championed the act, stating the “reform is expected to yield an additional R8 billion in corporate tax revenue in 2026/27”.

Put simply, this reform is like hitting pause on a game where countries keep trying to outdo each other by lowering corporate tax rates to attract businesses. It’s a bit like a race to the bottom—everyone ends up losing out on money they could have used for things like schools, roads, or hospitals. It’s about finding a fair balance—keeping businesses happy while still making sure they pay their fair share to support the country.

Key to this reform is the domestic minimum top-up tax, which ensures that if an MNE pays less than 15% tax in one jurisdiction, the South African Revenue Service (SARS) can step in to collect the difference.

But it’s not all smooth sailing. Concerns have been raised about whether South Africa will truly reap significant revenue gains. Advocacy groups like the Institute for Economic Justice argue that the earnings threshold is too high, exempting many multinationals.

Equity in the workplace: Employment Equity Amendment Act

Shifting gears to the workplace, the Employment Equity Amendment Act (EEA) came into effect on January 1, 2025, bringing significant changes to employment equity targets and compliance requirements.

So, what’s new? 

If you’re a small business with fewer than 50 employees, good news—you no longer have to create and submit those detailed Employment Equity (EE) plans or reports. But there are some non-negotiables: if you want to work with the government, you still need to follow anti-discrimination laws and pay at least the National Minimum Wage.

For bigger businesses, things are getting stricter. The government is rolling out sector-specific EE targets. So, depending on your industry, there’ll be specific goals you have to meet to promote diversity and fairness. If you don’t meet these targets, you won’t get a compliance certificate—which means you can’t do business with the government or state-owned companies.

Ramaphosa’s to-do list

While these two laws are already shaking up the landscape, several critical pieces of legislation still sit on President Ramaphosa’s desk, waiting for the go-ahead. 

For starters, there’s the Cybersecurity Bill, a crucial step towards safeguarding South Africans as our lives become more intertwined with the digital world. The Cyber Crimes Act 19 of 2020 was signed into law by Ramaphosa in June 2021; however, it is currently only in partial operation.

In addition, there are currently 18 laws awaiting the President’s sign-off. Some of these include: 

  • Marine Pollution (Prevention of Pollution from Ships) Amendment Bill
  • Copyright Amendment Bill
  • Housing Consumer Protection Bill

These laws have the potential to significantly impact daily life, so all eyes are on Ramaphosa to see when—and how—they’ll move forward.

The Global Minimum Tax Act and EEA signal South Africa’s commitment to aligning with global standards while addressing local challenges. However, as these laws roll out, there are still questions about their practicality, fairness, and impact on the economy.

Only time will tell how effective these new laws will be for South Africa, but it’s clear: 2025 is already off to a transformative start.