South African government taking more money from citizens

South Africa’s tax per citizen and average tax-to-GDP ratio have increased significantly over the last thirty years.

This was revealed in South Africa’s latest tax statistics, released by the National Treasury and the South African Revenue Service (SARS).

The report showed that tax collections have increased from R113.8 billion in 1994/95 to R1,740.9 billion in 2023/24, at a compounded annual growth rate of 9.9%.

In 1995, South Africa’s population was around 44 million. This translates into R2,586 of tax collected per citizen.

When this amount is adjusted for inflation, it means that the South African government collected R12,836 per person.

Since then, South Africa’s population has grown to 63 million, and the government has collected R1.74 trillion in taxes.

This means that the government is now collecting R27,633 in taxes per citizen, more than double it did thirty years ago.

SARS collects most of the tax from personal income tax (PIT), VAT, and company income tax (CIT).

The state has also introduced new taxes and increased existing tax rates in addition to collecting more taxes from more people.

The rise in taxes is also illustrated in tax revenue as a percentage of GDP. The tax-to-GDP ratio measures the overall tax burden for a given period.

A higher tax-to-GDP ratio indicates a country has higher taxes relative to its economic output, while a lower ratio indicates a lighter tax burden.

The median tax-to-GDP ratio globally is around 22%, but many middle- and low-income countries have much lower levels.

In 1994/95, South Africa’s tax revenue was 20.2% of GDP. In 2023/24, this ratio has increased to 24.5%.

The average tax-to-GDP ratio for the 36 African countries in the Revenue Statistics in Africa 2024 publication was 16.0% in 2022.

It shows that South Africa has a much higher tax burden than most African countries and international standards.