Are South Africans overtaxed?

Govt needs extra R58bn and must collect that without increasing VAT by 2%.

- Ina Opperman

With 1.5% of the population paying almost 61% of all the income tax the SA Revenue Service (Sars) collects and Cabinet making plans to cover the R58 billion shortfall in the budget, consumers may be asking if they are overtaxed and if they will pay even more after the budget speech on 12 March.

According to the unembargoed Budget Review that would have accompanied the postponed budget, 978 140 of South Africans or 1.5% of the population, pay 60.9% of all personal income tax in the country, while only 235 542 or 0.4% pay 33% of all personal income tax in a country with a population of 62 million.

The budget review shows that government needs an extra R58 billion but must now try to collect that in tax without increasing VAT by 2% to satisfy the other parties in the government of national unity.

Is it a good idea to increase personal income tax to make up the shortfall?

Zandi Makhoba, consumer economist at Liberty, said it is a possibility as it was effectively done in the 2024 budget. "The real question is if that would raise the R58 billion shortfall without hurting economic growth.

"Employment is relatively stable and has been growing and, therefore, it is pretty much a guaranteed revenue stream, unlike corporate income tax which depends on business profitability.