Tax revolt in South Africa

South African taxpayers are increasingly frustrated by the lack of services they are receiving for the amount of tax they pay. 

This is exaggerated by it being a tiny proportion of the population that foots the majority of the personal income and corporate income tax bill. 

These individuals and businesses are increasingly hounded by SARS for additional revenue to bolster the government’s finances. 

In turn, SARS is under immense pressure from the National Treasury to squeeze more revenue from a stagnant economy. 

This has the potential to result in increased resistance from South Africans, Efficient Group chief economist Dawie Roodt warned. 

Roodt has said previously that South Africa is over the edge with regard to its personal and corporate income tax rates. 

He explained that the government is unlikely to generate additional revenue by increasing these tax rates, as it will become financially beneficial for individuals and businesses to invest in reducing their tax burden. 

However, in an interview with the NSN podcast, Roodt said the government is in a difficult position, with it desperately needing more revenue to bolster its finances. 

This pressure has been created by decades of financial mismanagement and reckless spending by the ANC government. 

“What is happening is that the state just keeps spending like there is no tomorrow. You cannot fund that in a stagnant economy,” Roodt said. 

“The only way the state can fund that is by putting more and more pressure on SARS, and SARS will squeeze the economy for the last drop of blood.” 

This is not good for economic growth, with the government taking more money out of the economy and not using it productively. 

“The Finance Minister is taking more money out of the economy because SARS is being more aggressive,” Roodt said. 

“People do not like that. I am afraid that there is not much space for the government and room for movement in South Africa.” 

Too few taxpayers

Roodt’s comments come as there is increasing pressure on a fraction of the South African population to provide revenue for the state. 

Around 2.4% of South Africans pay 77% of all personal income tax, with high-income individuals being taxed at a rate of 41%. 

This is not where the story ends, however, with these individuals getting very little from the government by way of services. 

Individuals still pay for private medical aid to make up for the collapse of state hospitals, private security for the police, and private education. 

These are forms of what Roodt calls “double taxation”, where private individuals have to pay twice for the same services. 

This has led to growing frustration from South Africans, who increasingly feel they are not getting what they pay for. 

A Daily Investor calculation from earlier this year showed that an individual earning R100,000 per month can pay up to 80% in ‘tax’ when including what they spend on services they should get from the state. 

This includes value-added tax (VAT) on nearly all purchases, excluding VAT-exempt food items, as well as several fuel taxes levied at the pump. 

Individuals who save and invest in stocks, property, and other assets face several additional taxes, including a 20% flat tax on dividends and a capital gains tax. 

Interest earned from bank savings accounts or fixed-income investments is added to an individual’s taxable income and taxed at their marginal tax rate, with the first R23,800 being tax-free. 

As a result, an individual’s tax burden in South Africa is significantly greater than the headline personal income tax rate. 

South Africa has a history of tax revolts, with many being relatively localised and highly successful in achieving their aims. 

The most successful was the e-Toll disobedience campaign, where motorists in Gauteng simply refused to pay for e-Tolls when they launched in 2013. 

Widespread disobedience made enforcement by SANRAL impossible. Compliance rates plunged to 10%, and eventually the tolling system was scrapped in 2024. The debt of motorists was wiped out in 2026. 

More recently, there have been several localised ratepayer revolts where property owners refuse to pay property rates and taxes.

These revolts are often caused by deteriorating service delivery, with ratepayers refusing to pay for services that are not delivered. 

The most famous revolt occurred in Westville, KwaZulu-Natal, with other examples taking place in the Free State and the North-West Province. 

As property rates continue to rise alongside tariffs for electricity, water, and refuse collection, such revolts are likely to become more frequent.