Corporate income tax growth has been lagging as South African businesses struggle in the country’s tough operating environment.
An analysis by Daily Investor revealed that the government’s total tax revenue has grown by almost 89% over the past decade – from R986.3 billion in 2014 to an estimated R1.86 trillion in 2024.
This was largely boosted by personal income tax revenue, which grew by over 109% between 2014 and 2024.
Value-added tax (Vat) revenue increased by 82.46%, and revenue from the fuel levy by 92.65%.
Corporate tax revenue, however, has only grown by 63.69% over the past decade.
In 2022/23 corporate tax revenue was R344.66 billion. In 2023/2024 this fell to R301.37 billion. South African companies struggled to make higher profits in the country’s moribund economy.
This is being exacerbated due to the country’s small and shrinking tax base.
National Treasury’s data show that personal income tax generates about 40% of South Africa’s tax revenue, ahead of Vat and corporate income tax.
Data for the 2024/25 financial year showed South Africa has 7.4 million personal income taxpayers.
Thus 12% of the population pays personal income tax, and 862,000 of those people pay 58.7% of all personal income tax.
This means that only 1.4% of the population provide most of the money for education, healthcare, security, and social grants for 28 million people.
Corporate income tax is only set to contribute R303 billion (16.2%) to tax revenue this year.
In 2023 economist Dawie Roodt revealed that 770 companies pay around 66% of all corporate income tax in South Africa.