Every year, just before the national budget speech, a new set of tax statistics is released. These numbers may seem abstract, but they give us a clearer picture of how the country is earning and spending its money. This year, SARS collected an impressive R1.855 trillion in net tax revenue (That’s R1,855,000,000,000,000 in numerals) —an increase of 6.6% from the previous year. The growth is stronger than both inflation and real economic growth, which helped push the tax-to-GDP ratio up to 25.1%. SARS also estimates that R304 billion of the total came from stronger compliance efforts, which means they’re getting better at closing loopholes and ensuring people and businesses pay what they owe.
South Africa relies heavily on three major taxes. Whether we pay them directly or feel them through higher prices, they affect all of us.
1. Personal Income Tax (PIT)
PIT brings in the largest share of revenue at 39.5% making it the backbone of the tax system. This year saw an extra boost from withdrawals under the new Two‑Pot retirement system. But the bigger concern is how few people carry this tax. Out of 27 million registered taxpayers, only 7 million pay PIT, and the top 3% of earners contribute almost a third of the total. However because PIT forms part of employer costs, rising salaries can eventually lead to higher prices, meaning the impact goes beyond just the salaried workforce.
2. Value‑Added Tax (VAT)
VAT contributes 24.3% to total revenue. Since VAT is built into the price of most goods and services, everyone pays it, even if indirectly. It affects households across all income levels, including those relying on social grants, as businesses typically pass the cost through to consumers.
3. Company Income Tax (CIT)
CIT may look like a business tax on paper, but its effects ripple outward. Companies often recover the cost through pricing, lower wage growth, or reduced dividends. In other words, this tax eventually touches consumers, workers, and investors alike.
One of the clearest themes in this year's statistics is how heavily the system leans on a small portion of individuals and businesses.
Individuals
Taxpayers earning more than R1.5 million per year contribute nearly a third of all PIT. Older taxpayers also present a huge future challenge, with those over 55 paying R219 billion of the R811 billion total.
Corporates
The concentration is even sharper among companies. Just 630 large businesses—about 0.2% of all registered companies contribute around 60% of all corporate tax collected.
Why It Matters
The high revenue collection is a positive sign, showing improved efficiency and stronger enforcement from SARS. But the long‑term picture is more complicated. Relying on such a small pool of taxpayers to fund most government operations creates risk. If even a small portion of these individuals or companies leave the system—or struggle financially—the impact could be significant.
Broadening the tax base will require more people working, more businesses growing, and a healthier economy overall. Until then, South Africa’s fiscal stability will continue to depend on a small group carrying a very large share of the load.