BSARS recently released their annual tax statistics for 2012 which make for some interesting reading.

33% of taxes come from individuals. This is made up of 6 million taxpayers of whom 1.5 million are below the threshold of submitting tax returns. This is up from 1.7 million taxpayers in 1994. The average rate of tax paid by individuals is 21%.  We often hear that South Africa is the most unequal country when it comes to distribution of income, so it is not surprising that 10% of individuals pay 57% of personal income tax.

The next highest category is indirect taxes – VAT (25.7%) and Fuel Levy (4.9%). As this is a consumption tax it is borne by all citizens. Over the past several years, there has been a boom in retail spend driven by black consumers and this confirms that taxation falls on all the people of the country. The fact that taxis contribute substantially to the fuel levy underlines this.

Corporate South Africa pays 20.6% of taxes. This sector has been under pressure since the 2008 global slump and only one in three corporations actually pay tax.

The remainder of tax collections comes from Customs and Excise (4.6%), Secondary Tax on Companies (STC or dividend tax) 3% and then “other” makes up the balance.

How do we compare globally? 

On a corporate basis we compare reasonably well – our overall average rate is 33% as opposed to 44% globally and 57% for the rest of Africa. This puts us at 59th position out of 179 countries.

On an individual basis we are amongst the higher taxed nations – our top rate is 40% whereas the average global maximum rate is 28.9%. As this includes all countries it is perhaps best to compare South Africa to the BRICS (Brazil, Russia, India, China and South Africa) – Russia’s rate is 13%, Brazil’s 27.5%, India’s 30% and China’s 45%. We are still high on this basis.

On the indirect front, our VAT rate of 14% is relatively low versus other countries including the BRICS (Brazil 17%, Russia 18%, India 12.5% and China 17%).


In the past several years, SARS has considerably improved revenue collections. If we look at the three different sectors (corporate, individuals and indirect), we are probably close to global averages. We also know the government will continue to try and improve the lives of the poorer communities – more than 1 million more people to receive social grants, National Health Insurance etc. It looks as though tax increases could therefore be coming – and a VAT increase looks like the most likely option.

© DotNews, 2005-2012. This article is a general information sheet and should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein.  Always contact your financial adviser for specific and detailed advice.





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IC Marais

Professional experience:

IC Marais is a certified CA (SA) with public sector and private sector technical knowledge based on 5 years’ Public Sector accounting, auditing and financial management experience and 5 years audit, tax and accounting experience. Detailed knowledge of private and public sector accounting and auditing standards (GRAP, IPSAS, IFRS, IAS, ISA) and public sector financial legislation (MFMA, etc.)

He enjoys the outdoors, hunting and fishing.


Professional experience:

In 1995, Schalk started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and then Mazars Moores Rowland in 2007) in Bloemfontein. In 1998, Schalk was appointed as manager at Moores Rowland, where he became a partner in 2003. Schalk received his Postgraduate Certificate in Advanced Taxation in 2006 and in 2009 he received his Certificate in the Administration of Estates.


Professional experience:

Cedric started as a trainee at Warner and Newton (which became Moores Rowland in 1997 and Mazars Moores Rowland in 2007), Bloemfontein, in 1986. After completion of his articles, he joined the Special Investigations Division of the Department of Finance (SA Revenue Services) as a senior inspector from 1990 to 1991.


Professional experience:

Lucha started her career as a tax inspector at the Inland Revenue Department of New Zealand. After this she worked in commerce in Canada, Mexico and the United States.

On her return to South Africa, she completed her CA training contract with us and has been with Newtons ever since. She became a Partner in 2012.

Apart from her CA(SA) qualification she also holds a postgraduate certificate in Advanced Taxation (2005) and has the overall responsibility for training as our Training Officer.