South Africa's personal income tax has increased in share from ~30% to nearly 40% over the years

Key Takeaways:

  • In 2007/08, personal income tax (PIT) contributed 29.46% of total tax revenue, while corporate income tax (CIT) added a substantial 24.46%.
  • The share of personal income tax in tax revenue rose by 27% from 2007/08 to 2023/24.
  • Corporate income tax contribution declined by 26% from 2007/08 to 2023/24.
  • In 2019/20, personal income tax made the largest contribution to tax revenue (38.9%), a 32% rise from the 2007/08 contribution.
  • Other taxes showed minor variations, averaging around 19% of total tax revenue.
  • Personal income tax reached its peak contribution at 38.92% in 2019/20 before dropping by 4% in 2023/24.

In the fiscal years spanning 2007/08 to 2023/24, the composition of South Africa's tax revenue has experienced notable shifts, mirroring broader economic transitions. Personal income tax (PIT) has established itself as the primary source of revenue, climbing from 29.46% in 2007/08 to 37.28% by 2023/24 and peaking at 38.92% in 2019/20. This trend reflects an increasing dependence on individual taxpayers.

In contrast, the Corporate Income Tax (CIT) witnessed a decrease from 24.46% in 2007/08 to 17.99% in 2023/24, including a significant reduction to 15.60% in 2019/20. This pattern aligns with analyses indicating a reduction in CIT contributions linked to factors like a contracting tax base and difficulties faced by key industries.

Meanwhile, VAT contributions remained relatively consistent throughout the examined years, oscillating between 25.58% and 26.27%. Other taxes displayed slight variances, averaging around 19% of the overall tax revenue.

In conclusion, the increasing significance of personal income tax points to a growing burden on individual taxpayers, while the gradual decline in CIT may suggest attempts to foster a more favourable business climate or reflect wider economic challenges.

Source:

South Africa Revenue Service

Period:

2007-2024
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