Each year, the government’s financial budgets are valued in billions of rands. Where is the source of this money? What are the top five revenue streams for the South African government, as revealed on this page?
List of the five major sources of revenue for the government in South Africa
The South African government’s income comes mainly from taxes. The four biggest sources are:
- Personal income tax (29% of government income): Income tax is paid by everybody who earns a regular wage or salary. Richer people pay a higher percentage of their income as tax and once a person earns below a certain amount they pay no income tax.
- Company tax (27% of government income): All registered companies have to pay 29% of their profits as company tax.
- Value added tax (VAT – 26% of government income): All people in South Africa pay 14% VAT on any item that they buy unless that item is exempted from VAT (like bread, fresh vegetables and paraffin.) Many people think that poor people do not pay tax, but VAT is the one form of tax that they make a big contribution to.
- Customs and Excise (5%): When you import things from other countries you have to pay a set amount in import duties or tax. The reason for this is to protect jobs in South Africa. If we could import cheap things without paying any tax on them, then South African companies that make the same products would suffer.
The South African government also gets its money through its local government structures. The local government gets most of its income from selling electricity and water and from a special tax on property called `property rates’.