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We take a look at the latest budget estimates released by the National Treasury and focus on the main tax revenue sources for the South African government from 199/2000 financial year all the way to 2022/2023 (estimated). So where exactly is the South African government getting the bulk of their tax revenues from? Read on below to find out.
Note all data obtained from the National Treasury. |
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Some of South Africa's main tax revenue sources
So where exactly is the money the South African government spends coming from? While a fair chunk of the money is being borrowed by government issuing debt it promises to settle at a later stage while paying handsome interest on the money borrowed, a significant amount of South Africa's government finances comes from taxes paid by South African citizens and companies. While there are a large number of taxes levied on South African consumers and it feels that more and more taxes are added every year, the bulk of the tax revenue collected comes from Personal income tax (PIT), Corporate Income Tax (CIT), Value Added Tax (VAT), Fuel levies and customs duties.
The summary below shows the Rand value in taxes collected from various tax sources in the year 1999/2000 as well as the contribution these tax sources made up of total tax revenue collected by the South African government for that year.
Now lets take a look at the Rand value in taxes estimated to be collected by 2022/2023 from various tax sources as well as their contribution to estimated total taxes collected for the 2022/2023 financial year.
So the top 4 tax revenue sources for South Africa hasn't changed from 1999/2000 to 2022/2023. The only difference is the contribution of personal income taxes will have declined from almost 43% to just under 39%, while Value Added Tax (VAT) contribution to total tax revenues increased slightly. The concern for us and I am sure for most companies and business owners is the fact that the overall contribution of Corporate Income Tax will have increased significantly from contributiong around 10% of total tax revenues collected in 1999/2000 to contributing almost 17% of total tax revenues collected come 2022/2023, and we wonder why the unemployment rate remains so high and is not decreasing. Corporates do not have money to employ more people as they paying ever more in taxes to the government. Instead of employing more people that will pay personal income tax, VAT and all other related taxes.
Cutting Corporate Income Tax to allow them to employ more people is one simple way in which the tax net can be widened without the government losing out on tax revenues, in fact increased employment will lead to more people paying personal income tax and more people spending money, so more VAT collected. The net effect could actually be very positive for state coffers. But guess we wont know as the South African government seems hell bent on taxing companies to death.
They say only two things in life are certain, and they are death and taxes, but it seems in South Africa the government wants to tax its citizens and companies to death.
- Personal income tax: R 85 883 790 000 (42.67%)
- Value-added tax: R 48 376 840 000 (24.04%)
- Corporate income tax: R 20 971 610 000 (10.42%)
- Fuel levies: R 14 289 800 000 (7.10%)
- Specific excise duties: R 8 886 140 000 (4.42%)
- Customs duties: R 6 517 800 000 (3.24%)
- Secondary tax on companies/dividend and interest withholding tax: R 3 149 930 000 (1.57%)
- Transfer duties: R 1 821 640 000 (0.91%)
- Securities transfer tax: R 1 090 400 000 (0.54%)
Now lets take a look at the Rand value in taxes estimated to be collected by 2022/2023 from various tax sources as well as their contribution to estimated total taxes collected for the 2022/2023 financial year.
- Personal income tax: R 621 602 211 542 (38.62%)
- Value-added tax : R 405 598 325 715 (25.20%)
- Corporate income tax: R 258 356 754 812 (16.05%)
- Fuel levies: R 94 172 023 559 (5.85%)
- Customs duties: R 68 346 996 882 (4.25%)
- Specific excise duties: R 53 440 674 672 (3.32%)
- Secondary tax on companies/dividend and interest withholding tax: R 35 802 162 199 ( 2.22%)
- Transfer duties: R 8 600 740 591 (0.53%)
- Securities transfer tax: R 8 027 705 296 (0.50%)
So the top 4 tax revenue sources for South Africa hasn't changed from 1999/2000 to 2022/2023. The only difference is the contribution of personal income taxes will have declined from almost 43% to just under 39%, while Value Added Tax (VAT) contribution to total tax revenues increased slightly. The concern for us and I am sure for most companies and business owners is the fact that the overall contribution of Corporate Income Tax will have increased significantly from contributiong around 10% of total tax revenues collected in 1999/2000 to contributing almost 17% of total tax revenues collected come 2022/2023, and we wonder why the unemployment rate remains so high and is not decreasing. Corporates do not have money to employ more people as they paying ever more in taxes to the government. Instead of employing more people that will pay personal income tax, VAT and all other related taxes.
Cutting Corporate Income Tax to allow them to employ more people is one simple way in which the tax net can be widened without the government losing out on tax revenues, in fact increased employment will lead to more people paying personal income tax and more people spending money, so more VAT collected. The net effect could actually be very positive for state coffers. But guess we wont know as the South African government seems hell bent on taxing companies to death.
They say only two things in life are certain, and they are death and taxes, but it seems in South Africa the government wants to tax its citizens and companies to death.