0.09% of South African companies pay 72.3% of all corporate income tax

Efficient Group Chief Economist Dawie Roodt revealed that only 1,051 companies pay 72.3% of all corporate income tax in South Africa.

This shows how narrow South Africa’s tax base is and how important this very small number of large enterprises is to keep the country going.

Finance Minister Enoch Godongwana’s 2025 Budget showed that corporate income tax is South Africa’s third-largest revenue generator.

It is expected to generate R331 billion for the state in the 2025/2026 financial year, behind personal income tax of R811 billion and VAT of R500 billion.

However, the impact of these large companies goes far beyond paying large amounts of corporate income tax.

They are also the country’s biggest employers, which means their employees pay the most personal income tax.

As their employees spend their money, it generates large amounts of revenue for the state through value-added tax (VAT).

So, without these 1,051 companies, South Africa’s economy would collapse, and the state would not have the money for any of its social initiatives.

Many people wanted to target profitable companies and increase corporate income tax to generate more revenue, but this will not work.

The finance minister said increasing corporate or personal income tax rates would generate less revenue and harm investment, job creation and economic growth.

“Corporate tax collections have declined over the last few years, an indication of falling profits and a trading environment worsened,” Godongwana said.

Large corporations, especially mining companies, were hamstrung by logistics constraints and rising electricity costs.

Godongwana added that South Africa’s corporate income tax collections are already higher than those of most of its peer countries.

Roodt highlighted that South Africa cannot raise more revenue through company taxes because they are already too high.

“If you raise corporate income tax, companies will leave, and they will not do business in South Africa,” Roodt said.

The chart below, courtesy of Efficient Group and Dawie Roodt, shows the distribution of South Africa’s corporate income tax base.