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The National Council of Provinces (NCOP) has passed the Division of Revenue Bill during a hybrid plenary sitting today. The Bill was tabled by the Minister of Finance on 25 February 2026 as part of the national Budget.
 
Section 214(1) of the Constitution of the Republic of South Africa requires that a Division of Revenue Act be passed annually to ensure the equitable sharing of nationally raised revenue among the national, provincial and local spheres of government. The Bill outlines how nationally raised funds will be allocated across the three spheres of government for the financial year. It also provides for provincial allocations, additional funding to provinces and municipalities and the conditions attached to those allocations.
 
The Bill was passed by the National Assembly on 21 April 2026 and referred to the NCOP Select Committee on Appropriations for consideration and reporting, as required by Section 9(2) of the Money Bills Act. As part of its process, the committee invited all provincial portfolio committees on finance, together with the National Treasury, to participate in the Minister’s Budget briefing on 27 February 2026.
 
The National Treasury briefed the committee on the Bill on 17 March 2026, followed by consultations with the Parliamentary Budget Office (PBO) on 18 March 2026, in line with Section 15 of the Money Bills Act. The committee also consulted the Financial and Fiscal Commission (FFC) and the South African Local Government Association (SALGA) on the Bill, in compliance with Section 214(2) of the Constitution and Section 10(4) of the Intergovernmental Fiscal Relations Act.

The committee also undertook an extensive public participation process. Advertisements calling for public submissions in all 11 official languages were published on Parliament’s website and social media platforms and circulated to civil society stakeholders on the committee’s database. A total of 19 submissions were received from stakeholders, which included, among others, Amandla.Mobi, the Chartered Institute for Business Accountants, the Congress of South African Trade Unions (COSATU), Women on Farms Project, the Institute of Race Relations, Youth Capital, the Learning Trust, Masinyusane Development Organisation and the Legal Resources Centre.
 
During its deliberations, the Select Committee on Appropriations noted that the 2026 Budget of R2.4 trillion seeks to maintain fiscal stability while supporting economic growth, infrastructure investment and service delivery. Provincial allocations amount to R670.3 billion, while local government allocations total R110.1 billion.
 
As part of these investments, government has allocated R12.8 billion over the medium term to expand early childhood development (ECD) programmes. In addition, R800 million in 2026/27 has been redirected to protect key priorities, including R446 million for the National School Nutrition Programme, R13 million for learners with severe to profound intellectual disabilities, and R342 million to progressively equalise the salaries of Grade R educators. A further R175 million has been allocated for the implementation of the e-Cares system to improve data collection and strengthen the management of ECD services.
 
The health sector will receive an additional R6.9 billion to address compensation of employee costs, shortfalls in goods and services expenditure, and the employment of doctors. Additional funding shifts include R109 million for the agriculture sector to modernise systems such as e-certification and animal traceability, aimed at improving efficiency and competitiveness.
 
Through the public participation process, the select committee received submissions highlighting serious concerns about worsening financial and operational challenges facing municipalities, including ageing infrastructure, rising debt, poor revenue collection, weak planning capacity and persistent underspending of conditional grants. Stakeholders also raised concerns regarding funding pressures in the health and education sectors, youth unemployment, infrastructure backlogs and the adequacy of social support measures.
 
The committee observed that many municipalities continue to perform unfunded mandates on behalf of national and provincial government, placing severe strain on local finances and undermining service delivery. The committee further expressed concern over the continued use of outdated data in equitable share formulas, which may no longer adequately reflect current demographic and developmental realities.
 
To address these challenges, the committee recommended that the National Treasury, working with relevant departments and stakeholders, urgently review the local government fiscal framework, strengthen municipal revenue systems, improve conditional grant performance, enhance infrastructure planning and build technical capacity within municipalities.
 
The committee also called for stronger accountability and performance monitoring systems to ensure that public funds translate into tangible improvements in service delivery and infrastructure development. To access the full copy of the committee report, please click here (from page 57).
 
All nine provinces supported the Bill in their final mandates.
 
The Bill will now be sent to the President for assent.

Issued by Parliament of the Republic of South Africa