Your personal tax is government's largest tax income stream: Stats SA
National government’s biggest source of tax income is personal income tax‚ making up more than one in every R3 (38%) of the R1.22tn it collected in taxes in 2017/18.
That is what Stats SA revealed on Tuesday in the release of its latest financial statistics of national government report.
“The second biggest source of tax was value added tax (VAT)‚ followed by company income tax‚” Stats SA said on its website on Tuesday.
“The tax mix looked starkly different a decade ago. In 2008/09‚ national government collected about the same amount of personal income and company income tax: contributions that year were 31% and 30% respectively.”
Stats SA said the 2008 global financial crisis led to SA’s first economic recession since 1994‚ which hit business hard.
“Revenue from company income tax declined in 2009/10‚ and since then has grown at a much slower rate than the amount collected from personal income tax‚” Stats SA.
SA has among the top 10 highest tax-to-GDP ratios in eighth place‚ just behind New Zealand and Sweden and ahead of the UK‚ Australia and the US‚ according to the IMF.
“Notably‚ our neighbours Namibia and Lesotho are higher up on the ladder‚ in second and third places‚ just behind Denmark‚” Stats SA said.
“For a nation that has a high ratio but where taxpayers are receiving good value for money‚ a high tax burden might not be that detrimental. Countries such as Denmark‚ Sweden and Norway have high tax-to-GDP ratios‚ but these nations report the highest standard of living.”
Stats SA added: “The tax-to-GDP ratio alone provides no indication of good governance‚ the efficiency of the taxation system in the country‚ nor the way in which taxes are used or distributed.”
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