The tiny municipality in South Africa where people earn more than R500,000 a year

Gamagara in the Northern Cape has the highest taxable income in South Africa.

This is according to the National Treasury and the South African Revenue Service’s (SARS) recently published 17th annual edition of Tax Statistics.

SARS said that the 2023/24 fiscal year saw a sharp decline in Company Income Tax (CIT) revenue, especially in the mining sector.

“This decline was mainly a result of low commodity prices, which offset the revenue gains from the elevated commodity prices over the previous two years. In addition, weak global growth, persistent power outages, and logistical disruptions further weighed on the sector,” said SARS.

“Value-Added-Tax (VAT) revenue growth remained subdued as consumers continued to face financial constraints due to high interest rates, which eroded disposable household income and expenditure.”

Personal income tax (PIT) revenue remained buoyant, supported by a recovery in employment and earnings.

Looking at the full-year data for 2023, Gamagara Local Municipality in the Northern Cape had the highest average taxable income of R518,808.

This was followed by the City of Johannesburg, which had an average taxable income of R484,671.

Despite the Northern Cape being the least populated province in South Africa, it featured three times in the top ten for average taxable income, with Joe Morolong’s average standing at R427,977 and Tsantsabane’s at R405,926.

The top ten can be found below:

This is not the first time that the tiny Gamagara municipality has been highlighted by state agencies.

A recent report from Stats SA showed the Gamagara municipality spent the most per resident out of any municipality in South Africa in 2022, at R23,201 per person.

On the other end of the scale, the Nongoma municipality in KwaZulu-Natal only spends R1,389 per resident.

Stats SA said that Gamagara’s outlier status isn’t a once-off occurrence. In a similar study using 2016 data, the municipality also saw the highest per capita spending.

Stats SA said that Gamagara recorded a high value for the line item of ‘inventories losses/write-downs’ in 2022, which made up a huge part of its total expenditure.

That said, another reason for the heightened expenditure could be the town of Kathu, whose economy is mainly driven by Sishen, Kumba Iron Ore’s flagship mine.

The town attracts skilled workers and high-income earners for mining activities.

Stats SA also noted that Gamagara is relatively self-sufficient in terms of revenue.

“For every R100 of revenue in 2022, R90 was self-generated—i.e. sourced from property taxes, service charges, fines, etc.—while R10 was sourced from the national and provincial governments,” said the statistics agency.

“This is notable, as the R90 figure is above the B3 municipality (small town) average of R62 and the national average of R73. If this metric is used to measure self-reliance, Gamagara was the most financially independent municipality in 2022.”

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