The state is getting fatter. Your wallet isn’t.
By Magnus Heystek
Here’s a sobering thought: for the first 136 days of 2025, you weren’t working for yourself. You were working for the state.
Only from May 16 — Tax Freedom Day — did your income start landing in your own pocket.
Everything before that? Claimed by a government machine that’s long on promises, short on delivery.
This isn’t just a symbolic date. It’s a barometer. And this year, the barometer is flashing red.
Back in 1995, Tax Freedom Day fell on April 23. Now it’s nearly a month later.
This means South Africans are handing over a greater share of their income to the state — 37% of GDP compared to just 30% in 1995.
And what are we getting in return? Collapsing infrastructure, failing municipalities, and the privilege of buying our own water tanks, diesel, and private security.
It’s not just PAYE that’s bleeding households. VAT, fuel levies, sugar taxes, sin taxes, and municipal charges all add up.
It’s death by a thousand cuts. And make no mistake — the middle class, that dwindling pillar of economic stability, is carrying the lion’s share.
And yet, there’s no sense that the state is on a diet.
On the contrary. The public wage bill remains bloated. SOEs are bottomless pits. Policies like NHI and Expropriation Without Compensation continue to spook investors and citizens alike. The budget deficit widens. Debt balloons. And the calls for “wealth taxes” grow louder by the day.
But it’s not all doom and dustbins. You don’t have to emigrate to state-proof your wealth. There are ways to resist this slow expropriation by stealth.
Start with what you can move. South Africans still have generous offshore investment allowances — up to R11 million per year for those who know how to use them.
Global equity markets, property trusts, and hard-currency investments all offer better protection against rand weakness, policy instability, and local underperformance.
Next, reduce your taxable footprint. Make full use of tax-free savings accounts, and be smart about how you earn income. Not all rands are taxed equally.
If you haven’t had a frank conversation with a tax-literate advisor, now’s the time.
Invest with a focus on real returns. Too many local balanced funds have underperformed inflation over the past decade. That’s not wealth preservation — it’s slow-motion erosion.
Seek out managers who think globally, act independently, and aren’t afraid to go against the herd.
And yes, accept the hard truth: many public services are no longer reliable. That means budgeting for private healthcare, education, and security.
It’s not fair, and it’s not ideal — but it’s necessary. Waiting for reform won’t protect your retirement.
Ultimately, Tax Freedom Day is more than a quirky calendar event. It’s a reminder of who really controls the fruits of your labour — and how much of it you get to keep.
The state is not going on a spending diet anytime soon. But you can go on a fiscal fitness plan of your own.
Don’t wait for policy to change. Change your policy.
* Magnus Heystek is a director and investment strategist at Brenthurst Wealth.
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