A summary of the extraordinary tax burden South Africans face is set out in an article by Dr B C Benfield in Biznews. Corporate and personal taxation would have to be brought into line with the rest of Africa, ‘if not with the world’.
South Africa has one of the highest company tax rates in Africa at 38,8% (28% + 15% on dividends).
Personal tax at a maximum marginal rate of 45%(payable on earnings from US$115,000 pa.); it is the second highest in Africa after Cote d’Ivoire. We can’t we compete with African tax rates that are on average two thirds of ours, and with several very much lower than ours.
A further 15% VAT is paid almost every time we spend hard-earned, after- tax income.
In addition South Africans pay many further direct and indirect taxes, including excise duties on the purchase of everyday items like:
• Wine: 11%
- Beer: 23%
- Whiskey: 36%
- Cigarettes: 52%
- Petrol: 68%
plus a further 15% VAT on most of the above items.
Taxes on wealth and assets, include:
• Buying Property – taxes slide up to 13% on purchases from R10m
- Municipal Property Rates – R822,00 per R100,000 value more than 24%.
- Capital Gains: Applied at punitive rates to sales of assets by Individuals (18%) and Companies (22,4%)
- Effectively another 100% tax for persons to establish and maintain or to supplement the provision of services that the state and municipalities are expected to supply from taxes already paid. These include electricity, water, refuse removal, sewerage services, healthcare, security and education, either not provided at all, or provided at unacceptably low standards.
- Estate duty: On death, a further 20% of your assets above R3,5m goes to government.