Are South Africans taxed to the max?
South Africans pay a lot of tax, but squeezing them further will hurt the country’s international competitiveness
Strictly speaking, South Africans are not shouldering one of the heaviest tax burdens in the world. But the country is an outlier among emerging markets, suggesting there is little scope to hike taxes further and remain internationally competitive. Readers responded strongly to a recent FM opinion piece by Mike Schüssler of Economists.co.za (Budget, February 21). In it, he argued that SA has the ninth-highest tax-to-GDP burden in the world. Philippe Burger, an economics professor at the University of the Free State, disagrees with Schüssler’s interpretation of the statistics. According to the latest International Monetary Fund (IMF) data (for 2016), SA’s central government tax revenue stands at 26.4% of GDP. This puts SA in seventh place on an international list of 72 countries, with Iceland topping the list at 37.75%, Denmark second at 34%, the Seychelles third at 31.6% and Sweden in fourth place at 27.8%. SA even outranks the UK, which at 25.5% is in 11th place, Brazil, which is i...