South Africa has 8.3 million personal income taxpayers and 26.5 million grant recipients

South Africa relies on a narrow tax base, where a small percentage of individuals contribute the majority of the revenue.

The National Treasury’s 2026 Budget Review showed that South Africa has 14.2 million registered income taxpayers.

However, 5.9 million of these registered individuals have a taxable income below the income tax threshold.

That leaves South Africa with 8.3 million personal income taxpayers, which account for R844.8 billion in tax revenue for the state.

Personal income tax is the state’s largest revenue source, far exceeding the value-added tax of R521.4 billion and corporate income tax of R364.3 billion.

A serious concern for South Africa is its narrow tax base. Only 645,000 individuals pay half of all income tax in South Africa.

However, it gets worse. These individuals are also the ones running the companies which pay the most corporate income tax in South Africa.

This means that around 1% of people in South Africa are responsible for most of the tax revenue the state collects.

These figures illustrate the significant reliance on a small group of high-income earners to fund government expenditure.

The National Treasury highlighted that high direct taxes on a limited number of individuals and companies erode disposable income.

Beyond a certain point, increases in tax rates may not generate additional revenue and are detrimental to economic growth.

The Treasury said that South Africa’s reliance on personal and corporate income taxes is already higher than the OECD average.

Ultimately, the best way to increase state revenue is to broaden the tax base and grow the South African economy.

The table below shows South Africa’s personal income tax revenue by income group for the 2026/27 financial year.

Social grants in South Africa

The 2026 Budget Review highlighted social grants as a cornerstone of South Africa’s redistributive policy, providing support to millions of vulnerable citizens.

The social grant system currently supports approximately 26.5 million beneficiaries to reduce poverty.

Social grants constitute the largest share of the R412 billion the state spent on social development over the last year.

Excluding the social relief of distress grant, spending will increase from R246.6 billion in 2025/26 to R276.5 billion in 2028/29.

The old age grant, disability grant, and care dependency grant will increase to R2,400 in April 2026, while the war veterans grant will increase to R2,420.

The foster care grant will increase to R1,295, and the child support grant and grant-in-aid grant will rise to R580.

The social relief of distress grant is allocated an additional R36.4 billion to extend payments until 31 March 2027 of R370 per beneficiary per month.

National Treasury said it is tightening compliance in social grants, which has already yielded results.

The South African Social Security Agency’s allocation was made conditional on the agency improving biometric and income verification processes.

It is also committed to more frequent eligibility reviews for social grants and implementing other measures to tighten compliance.

By December 2025, the agency had checked the bank accounts of about 6 million clients and 8 million credit bureau clients.

These checks flagged 291,581 grant beneficiaries for review, which can significantly reduce the money spent.

As a result of the review process and strict implementation of the sliding scale, grant amounts were adjusted for 8,599 disability and old‑age grant recipients.

This results in projected savings of R36.4 million in 2025/26. A further 34,661 grants were cancelled, generating expected savings of R170.7 million.