Abstract

This article examines how the OECD/G20 Global Anti-Base Erosion (GloBE) Pillar Two rules affect the legal design and project economics of South Africa’s upstream oil and gas tax regime. It addresses a gap in the literature by combining doctrinal analysis of the Global Minimum Tax Act 46 of 2024 with an adaptation of the IMF’s Fiscal Analysis of Resource Industries model for a representative project. Under the modelled assumptions, the Qualifying Domestic Minimum Topup Tax reduces the investor’s internal rate of return from 29 per cent to 27 per cent, and its net present value (NPV) from US$4.792 billion to US$4.423 billion, while increasing the NPV of government fiscal receipts excluding state participation by 13.7 per cent. A scenario applying the 2026 Substance-based Tax Incentive Safe Harbour partly restores investor returns. The article concludes that Pillar Two partially neutralises the Tenth Schedule incentives and proposes a policy response for incentive design, legislative oversight and fiscal-stability negotiations.