Shaking up the stats: tax revenue numbers in the South African tax landscape
The National Treasury and South African Revenue Service (SARS) issued the 16th annual edition of Tax Statistics on 29 December 2023 in a joint media statement. This isn’t just another set of numbers; it’s a fascinating glimpse into the financial heartbeat of a nation. The comprehensive report released paints a vivid picture of tax revenue collection and tax-return trends spanning from 2019 to 2023 and the fiscal years 2018/19 to 2022/23.
The media statement unveils the dynamic world of taxation in South Africa, where billions are collected, refunded, and strategically allocated. The numbers are staggering: R2.07 trillion collected in gross tax revenue, R381 billion in tax refunds, and a net tax revenue of R1.69 trillion, representing significant growth from previous years.
Yet, behind these figures lie compelling stories—stories of geopolitical tensions, energy supply risks, labour strikes, and economic ebbs and flows. As you delve deeper into the pages of the report, you’ll witness the intricate dance between compliance revenue and focused efforts by SARS, leading to impressive results. Below is a short summary of what the numbers tell us.
The Tax Statistics unveil the power players in the tax game, with Personal Income Tax (PIT), Value-added Tax (VAT), and Corporate Income Tax (CIT) commanding the lion’s share of tax revenue. These categories contribute to 81.3% of the total tax revenue collected.
Tax-to-GDP ratio
There’s more to this tale than numbers alone. The tax-to-GDP ratio has soared to its highest point in decades, reflecting South Africa’s remarkable economic recovery post-COVID-19, increasing from 23.7% in 2018/19 to 25.1% in 2022/23, indicating economic recovery.
Personal Income Tax
Intriguingly, the report also shines a spotlight on individual taxpayers, revealing a dynamic landscape where the PIT register swells year by year, and millions of South Africans navigate the intricacies of income tax returns. The PIT register grew to 25.9 million individuals by March 2023, with approximately 7.1 million individuals expected to submit income tax returns for the 2022 tax year. PIT accounts for 35.7% of the tax revenue collected and remains the largest contributor.
Corporate Income Tax
Company Income Tax (CIT) statistics highlight the diverse landscape of businesses in South Africa. Some declare positive taxable incomes, while others report zeros, with a select few giant corporations dominating the CIT arena. In 2021, 20.7% of assessed companies declared a positive taxable income, while over half of these entities had taxable income equal to zero. Large companies accounted for a significant portion of CIT assessed. CIT collections contributed 20.6% of total tax revenue.
Value Added Tax, Import VAT and Customs Duties
VAT, Import VAT, and Customs Duties emerge as key players in the tax ecosystem, contributing significantly to the nation’s finances. They are not just taxes; they are the lifeblood of government revenue. Companies and close corporations comprised 80.8% of active VAT vendors, contributing significantly to domestic VAT payments.
Import VAT and Customs Duties accounted for 19.5% of Total Tax Revenue in the 2022/23 fiscal year, with specific economic sectors playing a significant role.
Other taxes and collections
This report doesn’t stop at numbers; it provides insights into the intricacies of South Africa’s tax world. From Capital Gains Tax (CGT) to Mineral and Petroleum Resources Royalty (MPRR), it reveals how the nation’s wealth is managed and redistributed. It is a document worth exploring to uncover the hidden narratives within South Africa’s tax landscape.
Read more about the 2023 tax statistics documents on the SARS website here. Sharing your insights, suggestions, and comments is not only welcome but vital in shaping the future of South Africa’s tax ecosystem. Join the conversation, and let’s decode the numbers together.
