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Personal income tax (PIT) collection, the largest source of tax revenue in South Africa, has fallen in recent years. Between 2003 and 2012, the number of PIT taxpayers grew by 7 percent. Since 2012, however, some of these gains have been eroded — with a 2,1 percent decline in the number of taxpayers, according to data from the South African Revenue Service (Sars).
This is particularly worrying as there were only 5,2 million individual taxpayers in 2020. These 5,2 million individuals, representing approximately 9 percent of the population, contribute 40 percent of South Africa’s total tax revenue. Breaking it down further, about 20 percent of individual taxpayers contributed to three quarters of personal income tax revenue in 2020.
Firstly, the decline in PIT has been the result of the weak economy which has reduced the ability of firms to grow, increase salaries and hire people.
The outlook for South Africa’s economy is expected to remain muted (GDP is expected to grow between 1,4 percent and 1,8 percent by 2023) and the unemployment rate has remained at untenable levels – so this trend is likely to persist.— Moneyweb.
Online Reporter