Bleak outlook for corporate income tax revenues
Personal income tax will probably contribute an even higher percentage of total tax revenue in 2020
Are SA’s domestic corporate income tax revenues aligned to the direction of future sources of economic growth from a sector contribution point of view? Economic growth plays an increasingly important role in the revenue collection prospects for any economy, and domestically the corporate income tax contribution to total taxes has decreased year after year. In 2018 the contribution accounted for about 18.1% of total tax revenues, behind VAT at 24% and personal income tax at 38.1%. According to the 2018 tax statistics, this is down from corporate income tax contribution of 19.8% in the 2013/2014 tax year. Following finance minister Tito Mboweni’s budget speech, personal income tax will probably contribute an even higher percentage of total tax revenue in 2020. The government has revised down revenue expectations due to higher-than-expected VAT refunds, while holding tight onto the income tax brackets, keeping them the same for the first time since 1990 and not adjusting them for infla...
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