It took taxpayers in South Africa 141 days to pay for government in 2024 – now you’re ‘free’
20 May 2024 marks “Tax Freedom Day” in South Africa – the first day of the year on which the nation as a whole has theoretically earned enough income to pay off the government’s tax burden.
From 1 January until 20 May, all the income earned by tax-paying South Africans is needed to pay for one year of government spending.
Put another way, this means that the average South African taxpayer has had to work 141 days to pay their taxes in 2024.
According to the Free Market Foundation (FMF), after Tax Freedom Day, taxpayers “work for themselves and their families”, and not for the government – although this is only theoretical.
The FMF has calculated and published South Africa’s Tax Freedom Day annually for the last 30 years.
The think-tank said that the day is an effective measure of how much time taxpayers spend working to fund state projects – and as government spending increases, the time it takes gets longer.
“Based on recent tax and spending levels, South Africa’s Tax Freedom Day is predicted this year to land on 20 May, four days later than last year.
“At the end of 2024, with complete data for the year, the date could be revised a couple of days earlier or later,” said Dr Richard J Grant, FMF senior consultant and Professor of Finance and Economics at Cumberland University, Tennessee.
“But over the past 30 years, the actual Tax Freedom Day has been trending ever later in the year – and making most people poorer,” he said.
In 2024, South Africans have had to work almost an entire month longer ‘for the state’ compared to 1995, when Tax Freedom Day occurred on 23 April.
Tax Freedom Day is determined in this way and spread over the first months of the calendar year to give an idea of how the burden of taxes affects the average taxpayer.
“It is accepted that some lose more and others less of their hard-earned income in taxes, but the average, measured in days of the year, confirms what people know intuitively: South Africans are paying too much tax with a very low return on investment,” the foundation said.
“Given the current state of affairs in South Africa, Tax Freedom Day is likely to trend later and later into the year as government spending, the deficit, and public debt continue to increase.”
Elaborating on the concept, Grant noted that “if Tax Freedom Day were on 1 January, taxpayers would be paying no tax, and if it fell on 31 December, the government would be taking all of our incomes as tax, and we would have nothing left.
“The later the day, the worse for the average taxpayer and for anyone who needs a job.”
A significant portion of South African taxes is currently going toward paying off government debt, with estimations that 20 cents of every R1 collected goes to this purpose. Taxpayers are also footing a massive public service wage bill.
The graph below outlines how South Africa’s Tax Freedom Day has changed over the last 30 years.
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