{"id":842561,"date":"2025-11-11T07:00:00","date_gmt":"2025-11-11T05:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=842561"},"modified":"2025-11-10T15:04:59","modified_gmt":"2025-11-10T13:04:59","slug":"south-african-taxpayers-only-get-5c-value-for-every-r1-they-pay","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/842561\/south-african-taxpayers-only-get-5c-value-for-every-r1-they-pay\/","title":{"rendered":"South African taxpayers only get 5c value for every R1 they pay"},"content":{"rendered":"\n

Efficient Group chief economist Dawie Roodt said South African taxpayers do not get much value for the money they give to the state.<\/p>\n\n\n\n

Roodt shared his views about South Africa\u2019s tax system during a discussion with podcaster Renaldo Gouws on the Truth Report.<\/p>\n\n\n\n

South Africa has a very narrow tax base, with 978,140 people, or 1.5% of the population, paying 60.9% of all personal income tax.<\/p>\n\n\n\n

An equally staggering statistic is that 1,051 companies paid 72.3% of all company income tax in South Africa.<\/p>\n\n\n\n

Personal income tax and company income tax are two of the core revenue streams for the state, which illustrates the concern about such a narrow tax base.<\/p>\n\n\n\n

This small percentage of individuals and companies must provide sufficient funds to cover the costs of education, healthcare, and social grants for all South Africans.<\/p>\n\n\n\n

Considering that South Africa has more than 28 million people who receive monthly social grant payments, it is a tremendous burden on taxpayers.<\/p>\n\n\n\n

There are also approximately 1.7 million people employed in South Africa\u2019s national and provincial public sectors, who get paid through tax revenue.<\/p>\n\n\n\n

That means that 7.9 million personal income taxpayers have to fund nearly 30 million grant recipients and government employees.<\/p>\n\n\n\n

Roodt explained that South African taxpayers are already stretched, and raising income taxes to generate additional revenue for the state is not possible.<\/p>\n\n\n\n

The only way to significant state revenue is to increase value-added tax (VAT), but that is politically unpalatable. Cutting government spending is also a political hot potato.<\/p>\n\n\n\n

This means that the only solution to South Africa\u2019s deteriorating financial situation is economic growth.<\/p>\n\n\n\n

However, the country has numerous business-unfriendly policies, including Black Economic Empowerment (BEE) and Affirmative Action.<\/p>\n\n\n\n

These policies deter many local and global investors from investing in South Africa, which, in turn, hampers economic growth.<\/p>\n\n\n\n

Taxpayers only get 5 cents of value for every R1 they give to SARS<\/h2>\n\n\n\n
\"\"<\/a>
Efficient Group chief economist Dawie Roodt<\/figcaption><\/figure>\n\n\n\n

One of the biggest gripes for South African taxpayers is that they do not receive much value for the taxes they pay.<\/p>\n\n\n\n

Many roads are full of potholes, the public healthcare system is deteriorating, and the education system produces some of the worst results globally.<\/p>\n\n\n\n

Roodt said this gripe was justified, explaining that South African income tax payers receive very little in return for their money.<\/p>\n\n\n\n

He created an equation to establish the value which income tax payers receive in return for the money they give to the government.<\/p>\n\n\n\n

He highlighted that he had to make assumptions for this equation, including that the state does not waste resources.<\/p>\n\n\n\n

\u201cI know this is not the case. Due to corruption, incompetence, and mismanagement, there is a lot of wastage in the government,\u201d he said.<\/p>\n\n\n\n

However, even with this assumption, a household with an income of R1 million per year will get less than 5% of the value they pay in taxes.<\/p>\n\n\n\n

Put differently, for every R1 this family pays in taxes, it will receive less than 5 cents in value from the government.<\/p>\n\n\n\n

This further shows that one family with an income of R1 million pays for approximately 20 families to get services from the state.<\/p>\n\n\n\n

\u201cIf the family\u2019s income goes up to R2 million or R3 million per year, they get far less value from the state for the tax they pay,\u201d Roodt said.<\/p>\n\n\n\n

This illustrates the importance of holding on to South Africa\u2019s tax-paying population, many of whom are looking to leave the country.<\/p>\n","protected":false},"excerpt":{"rendered":"

Efficient Group chief economist Dawie Roodt said South African taxpayers do not get much value for the money they give to the state.<\/p>\n","protected":false},"author":10,"featured_media":841739,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[22379,1459,2562],"class_list":["post-842561","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-black-economic-empowerment-bee","tag-dawie-roodt","tag-efficient-group"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842561","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=842561"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842561\/revisions"}],"predecessor-version":[{"id":842566,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/842561\/revisions\/842566"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/841739"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=842561"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=842561"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=842561"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}