{"id":817005,"date":"2025-03-17T07:00:00","date_gmt":"2025-03-17T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=817005"},"modified":"2025-03-14T17:58:28","modified_gmt":"2025-03-14T15:58:28","slug":"0-09-of-south-african-companies-pay-72-3-of-all-corporate-income-tax","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/817005\/0-09-of-south-african-companies-pay-72-3-of-all-corporate-income-tax\/","title":{"rendered":"0.09% of South African companies pay 72.3% of all corporate income tax"},"content":{"rendered":"\n

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

This shows how narrow South Africa\u2019s tax base is and how important this very small number of large enterprises is to keep the country going.<\/p>\n\n\n\n

Finance Minister Enoch Godongwana\u2019s 2025 Budget showed that corporate income tax is South Africa’s third-largest revenue generator.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

However, the impact of these large companies goes far beyond paying large amounts of corporate income tax.<\/p>\n\n\n\n

They are also the country\u2019s biggest employers, which means their employees pay the most personal income tax.<\/p>\n\n\n\n

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

So, without these 1,051 companies, South Africa\u2019s economy would collapse, and the state would not have the money for any of its social initiatives.<\/p>\n\n\n\n

Many people wanted to target profitable companies and increase corporate income tax to generate more revenue, but this will not work.<\/p>\n\n\n\n

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

\u201cCorporate tax collections have declined over the last few years, an indication of falling profits and a trading environment worsened,\u201d Godongwana said.<\/p>\n\n\n\n

Large corporations, especially mining companies, were hamstrung by logistics constraints and rising electricity costs.<\/p>\n\n\n\n

Godongwana added that South Africa\u2019s corporate income tax collections are already higher than those of most of its peer countries.<\/p>\n\n\n\n

Roodt highlighted that South Africa cannot raise more revenue through company taxes because they are already too high.<\/p>\n\n\n\n

\u201cIf you raise corporate income tax, companies will leave, and they will not do business in South Africa,\u201d Roodt said.<\/p>\n\n\n\n

The chart below, courtesy of Efficient Group and Dawie Roodt, shows the distribution of South Africa\u2019s corporate income tax base.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n","protected":false},"excerpt":{"rendered":"

Efficient Group Chief Economist Dawie Roodt revealed that only 1,051 companies pay 72.3% of all corporate income tax in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":813796,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[21728,22030,1459,17448,21799],"class_list":["post-817005","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-2025-budget","tag-corporate-income-tax","tag-dawie-roodt","tag-enoch-godongwana","tag-finance-minister-enoch-godongwana"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817005","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=817005"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817005\/revisions"}],"predecessor-version":[{"id":817008,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/817005\/revisions\/817008"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/813796"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=817005"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=817005"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=817005"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}