How many millionaires live in South Africa – with 82,000 more expected

Despite losing a notable amount of ultra-wealthy people, South Africa is expected to have gained over 80,000 more taxpayers who earn over R1 million annually compared to the previous financial year.

According to Henley & Partners’ ninth Africa Wealth Report, South Africa has lost over 11,000 dollar millionaires in the past decade—a decline that represents 20% of its millionaire population.

This significant reduction is attributed to two primary factors: concerns over personal safety and security and the poor performance of the local economy, which has made it increasingly difficult to generate new wealth.

Faced with these challenges, many affluent South Africans have opted to leave the country in search of greater stability and security abroad.

Henley & Partners’ latest Wealth Migration Report for 2024 highlights that South Africa remains one of the leading countries experiencing a net outflow of millionaires, with approximately 600 HNWIs expected to emigrate in the coming year.

The definition of an HNWI, as used in these reports, is an individual with liquid investable wealth of $1 million or more, which translates to roughly R18 million at current exchange rates.

Despite this continued outflow, South Africa still manages to retain a significant number of wealthy residents.

These residents are drawn to the country’s appealing lifestyle factors, such as its warm climate, picturesque landscapes, and relatively low cost of living.

According to the latest tax statistics from the National Treasury and the South African Revenue Service (SARS), 490,676 South Africans earn over R1 million per annum in the 2024/25 financial year.

This figure represents 6.7% of the country’s 7.4 million registered taxpayers and marks a significant increase of 82,000 individuals compared to the previous financial year when 408,288 South Africans earned above this threshold.

These figures suggest a notable rise in the number of rand millionaires despite broader economic challenges.

However, while this growth in wealthy taxpayers is encouraging, it could face a reversal if a wealth tax is introduced.

The National Treasury has confirmed that it is exploring the feasibility of such a tax.

Chris Axelson, acting head of tax and financial sector policy, recently stated that Treasury is working with SARS to analyse data on declared wealth to better understand its distribution.

Based on these findings, a decision will be made on whether to implement a wealth tax and, if so, what form it might take.

Options under consideration include taxing wealth directly or focusing on returns generated by wealth, which are already subject to taxes like personal income tax, capital gains tax, and levies on interest and rentals.

While some advocacy groups argue that a wealth tax could help address inequality, the proposal has sparked significant opposition from economists and tax experts.

Critics warn of potential unintended consequences, such as capital flight and reduced investment, as wealthy individuals and businesses move their assets to more tax-friendly jurisdictions.

Dawie Roodt, chief economist at the Efficient Group, has been particularly vocal in his concerns, stating that a wealth tax could exacerbate South Africa’s economic challenges by undermining investor confidence and further weakening the economy.

Other economists echo these concerns, emphasising that South Africa’s tax base is already under immense strain.

The country’s high-income earners, though few in number, contribute a disproportionate share of tax revenue.

Adding another layer of taxation could drive these individuals out of the tax net, either through legal tax avoidance strategies or emigration.

The debate over a wealth tax comes at a time when South Africa is already grappling with slow economic growth, high unemployment, and rising debt levels.

While the increase in rand millionaires provides a glimmer of hope, the country’s ability to sustain this growth will depend on maintaining a stable and conducive environment for wealth creation.

Policymakers face the delicate task of balancing the need to address inequality with the imperative of fostering economic stability and growth.

Read: The man who’s a hair away from becoming South Africa’s next dollar billionaire