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Pay Your Taxes

Throughout history paying tax has never been popular even though people realise it is needed to help run the country they live in.

Beside business and personal tax, South African consumers also pay various taxes towards fuel and on good such as V.A.T.

These taxes are then used by Government to supply services needed to run the country and maintain various services like roads and affordable healthcare. Taxes also fund the various grants offered in South Africa. At present over 19 million South Africans, which is about 1/3rd of the population, receive a government grant.

What may surprise you however is just how tiny SA’s tax base is and how just a few people and companies are paying most of the tax.

Less Than 3% of South Africans

In South Africa, a tiny percent of people carry the weight of the country’s tax system.

Shockingly just 2.6% of the population (about 1.66 million people) pay more than 76% of all personal income tax.

That’s less than 3%.

These individuals reported a combined taxable income of R2.3 trillion in the 2023/24 fiscal year, contributing R499.9 billion in taxes. This reliance on such a small group shows how precarious and weird the system is, with most people falling outside the tax net. 

This is, of course, also linked to the incredibly high rates of unemployment in South Africa and big disparity between those earning a lot and those earning very little.

1000 Businesses

Businesses face a similar challenge, with only 1,051 companies—just 0.1% of all businesses—paying 72.3% of corporate taxes.

These are mostly large companies with taxable incomes exceeding R100 million, carrying the bulk of the corporate tax responsibility. However, revenue from corporate taxes has recently declined in key sectors like mining, while VAT growth has stalled due to weaker consumer spending.

This puts even more pressure on the small group of companies keeping the system afloat, highlighting the risks of over-reliance on a narrow tax base.

A Shrinking Taxpayer Base

The heavy tax burden is slowly driving many wealthy individuals and businesses to leave South Africa for countries with lower taxes. It’s hard to blame them.

This ongoing trend unfortunately worsens the problem, as fewer taxpayers are then left to support public services and social programs.

Frustration among SA’s middle class is also growing because, despite paying taxes, they often end up having to pay for private healthcare, education, and other services that they feel are not being provided by Government.

As more people and businesses leave, the tax base shrinks further, creating a vicious cycle of increasing pressure on those who stay.