Go back to the budgets of the early to mid-2000s and the constant refrain was that the government had managed to cut tax rates and give billions of rand in tax concessions back to taxpayers each year, thanks to better compliance and a broader tax base. No longer. The overall tax burden has risen steeply in recent years as the government has sought to make up for faltering economic growth and shortfalls in revenue by raising effective tax rates. This has been nowhere more stark than in personal income taxes, which accounted for 37.2% of tax revenue in the 2016-17 fiscal year, up from 34% in 2012-13. The contribution of the other two big taxes — value added tax (VAT) and corporate income tax — declined over the period to 25.2% for VAT (from 26.4%) and just 18.1% (19.8%) in the case of corporate income tax. The greater tax burden on individuals is the most striking feature of SA’s tax system in the post-financial-crisis era and has become narrowly focused on a relatively small group of...
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