You have finally finished paying the government

South Africans who pay tax are finally beginning to work for themselves after Tax Freedom Day on 22 May 2026. 

Tax Freedom Day, calculated by the Free Market Foundation (FMF), calculates how long the average South African must work each year to cover the total tax burden before earning for themselves. 

The later in the year the data falls, the greater the share of the economy is being consumed by the government through taxes. 

In 2026, the average South African taxpayer worked 142 days to pay their share of the state’s total tax burden. This equates to a tax-to-GDP ratio of 39%. 

This is significantly further into the year compared to 1997, when the FMF first began tracking Tax Freedom Day. In 1997, the average South African worked until 12 April to cover the government’s spending. 

The extension of Tax Freedom Day deeper into the year reflects the increasing share of resources the government is taking from the economy to fund its spending programmes. 

This is partly due to South Africa’s stagnant economy over the past 15 years, which has limited earnings growth and created a fiscal crisis. 

However, the major driver behind this is the government’s surge in spending from 2008 onwards, after it achieved its first full budget surplus after a decade of hard work. 

The government’s increase in spending did not translate into faster economic growth, resulting in South Africa’s debt burden as a share of output growing significantly. 

South Africa’s debt-to-GDP ratio in the 2008/09 financial year was 26%. As of the latest reading, it has more than tripled to a share of 78% of GDP. 

As a result, the government is paying over R1 billion a day in interest payments on this debt, crowding out spending in other areas.

Currently, the economy is growing at a slower rate than the interest rate the government pays on its debt. This means its debt-servicing costs are compounding at a faster rate than the economy, which is unsustainable.

The tax burden is growing

The government has only one realistic way to address this fiscal crisis, and that is by growing tax revenue significantly to bolster its financial health. 

This can be done by growing the economy, which will naturally create more tax revenue without needing to increase tax rates. 

However, in a stagnant economy, SARS has to squeeze more revenue out of a small tax base, and tax rates have to be raised. 

South Africa has a highly concentrated tax base with 1.5% of all individuals paying over 60% of all personal income tax. 

This means that 978,140 people pay R442.3 billion in personal income tax, funding a significant portion of government expenditure.

Senior associate at the FMF Richard Grant warned that excessive taxation and government spending can be very destructive if carried out for an extended period of time. 

“The negative correlation between government spending and GDP growth is a sign that the government has grown beyond its core functions,” Grant said. 

He explained that unlimited taxation power leads to national decline and that transfer payments from the financially successful to an unproductive government harm economic growth. 

This dynamic also erodes the incentive to work and invest, lowering the overall productivity and living standards of South Africa. 

What makes South Africa’s situation significantly worse is the unproductive nature of the state’s spending, with much of it going towards consumption and salaries rather than investment. 

This has resulted in the infrastructure deteriorating significantly in recent years, which is experienced in the form of load-shedding, water outages, a lack of policing, and logistics bottlenecks. 

The FMF has called on the state to refocus on these core functions, which have fallen by the wayside as the government emphasised its transformation agenda above service delivery. 

It also said that this is not only a matter of finances, but it also represents a removal of freedom for South Africans to choose how they spend their money.