CIL Group Ltd

According to the latest survey published by the South African Institute of Race Relations (SAIRR), the total number of registered individual taxpayers in South Africa grew from 3.4m in 2002/03 to 5.9m in 2009/10, an increase of 73%.

A researcher at the SAIRR, Marius Roodt, said the increase in the number of individual taxpayers was good news. However, he pointed out that, “at the same time, wastage and corruption within the government and its various departments are a cause for concern, and there is no guarantee that revenue is spent wisely.”

He also noted that, although the total contribution of personal income tax payers was the single highest, it contributed only a third of total revenue that the government received from tax. He noted that “corporate tax and value added tax (VAT) together contribute nearly 50% of total tax revenue. It is thus misleading to say, as some commentators do, that individual taxpayers bear the major burden of financing social grants.”

In fact, the total number of companies registered for tax grew from 815,000 in 2002/03 to 1.9m in 2009/10, an increase of 131%. The number of employers registered for pay-as-you-earn tax grew from 253,000 to 396,000 between 2002/03 and 2009/10, an increase of 57%; and the number of vendors registered to pay VAT grew from 506,000 in 2002/03 to 686,000 in 2009/10, an increase of 36%.

The survey confirmed that, whether directly or indirectly, everyone in South Africa ends up paying some sort of tax through VAT, company tax, fuel levies, customs and excise duties, and/or personal income tax.

Personal income tax collections for the 2009/10 fiscal year amounted to ZAR207bn (USD29.5bn), representing 35% of total revenue collections, up from 31% in 2008/09, and were the single biggest contributor to the Government’s coffers.