Small group of 268,000 South Africans keeps the economy alive

A small group of 268,000 South Africans is behind a large share of personal and corporate income tax in South Africa.

This was revealed in the National Treasury’s 2026 Budget Review, which shared information about the country’s tax base.

South Africa has 14.2 million registered individuals who have been formally issued a tax reference number by the South African Revenue Service.

However, 5.9 million registered individuals have a taxable income below the income tax threshold. Simply put, they do not pay personal income tax.

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

This group is split up into income categories, which showed that only 645,000 individuals pay half of all income tax in South Africa.

The biggest group in terms of income tax is the 267,761 people who earn above R1.5 million per year. They pay 33% of all income tax.

Many may argue that, although they are important, they only account for a third of income tax, and losing them will not be devastating. This is misguided.

This small group of people, around 0.4% of the population, is the top executives and business owners driving the economy.

The people in this group run South Africa’s largest companies and are behind most of the R364.3 billion in corporate income tax.

About 1,195 companies pay over R200 billion in tax each year, making corporate income tax the most concentrated form of government revenue in South Africa.

Put another way, 0.1% of registered companies in South Africa pay over 66% of all corporate income tax in the country.

These companies are also the biggest employers. Without them, most of the personal income taxpayers would not have jobs.

This group of driven and industrious individuals is often called rainmakers because of their ability to generate business that wouldn’t have existed otherwise.

These rainmakers act as catalysts for economic activity and growth because of their capital allocation and business ecosystem growth.

South Africa should protect its richest people

Efficient Group chief economist Dawie Roodt said it is crucial for South Africa to look after wealthy individuals, as they support the country and its poor citizens.

Roodt said his calculations showed that one family with an income of R1 million pays for approximately 20 poor families to get services from the state.

The taxes from this one family pay for the education, healthcare, grants, housing, and other state services used by the poor families.

Families with a household income of R2 million or R3 million per year support even more poor families, as their tax burden will be much higher.

This highlights the importance of retaining South Africa’s tax-paying population, many of whom are considering leaving the country.

“A small group of wealthy individuals carries a very heavy tax burden in South Africa. We are completely overtaxing rich people,” Roodt said.

He highlighted that if the state continues to overtax this group, they will react in a way that is detrimental to the country.

One way is to aggressively use methods to avoid paying tax, which results in lower revenue for the government.

Another is that they leave South Africa. “Many rich people emigrate, which means South Africa loses productive individuals,” he said.

“Wealthy individuals will move to other countries where they either pay less tax or get more value from the state for the tax they pay.”

Roodt said the state must realise that wealthy individuals are very important to South Africa and that they should be looked after.

“They are the people carrying the state’s finances, they are the economic growth engine, and they are behind most of the savings,” he said.

His message to the government is simple – “Look after our rich people. We need them.”