Who pays tax in South Africa?

When we think about tax, we immediately think of the deduction called PAYE that’s reflected on our payslips. The truth is that every person in the country pays tax.

There are many types of taxes such as the following:

  • PAYE: An acronym for PAY AS YOU EARN. This is a salary you pay if you are a salary earner, and earn over a certain amount (around about R8000 per month).
  • Capital gains tax: If you buy an investment property for a million rand, and sell it for more than that, you pay tax.
  • Corporate tax: Companies pay tax at a rate of 28% per annum.  
  • Sin tax: This is a tax that’s paid on cigarettes and liquor.
  • VAT: That’s a tax paid on all products and services consumed in the country. There are a few exceptions to this like basic food items, rent, etc.
  • Tax on vehicles: Every time a new car is bought, a portion of the price is tax.
  • Tax on road travel: Toll roads/gates are a form of tax.
  • For a car to legally be used on a public road, a tax is paid annually in the form of your vehicle licence renewal fee.
  • Tax on fuel: A portion of the price of petrol or diesel is tax.
  • Tax on Air travel: A portion of the ticket price is tax.
  • Customs tax: Most products imported from across our borders, attract a tax.
  • Transfer duties: When you buy a property over a certain amount (a little over a million rand), you pay a tax.
  •  Donations tax: When you give something away for nothing, you pay tax.When a father giving a house to a son, tax is paid.
  • Estate duty: When a person dies, and assets like a house, car, money, investments have to change hands from the deceased person to the living person (heir) in the form of an inheritance, a tax is paid.

To all of the above, there are some exceptions and exemptions, SARS allows you to deduct certain amounts for specific things, so you would pay less tax. But the fact of the matter is that everybody is a taxpayer in South Africa, whether you are rich or poor, live in a mansion or on the street, nobody can escape the wide tax net.

Did I leave out something in this write up or is there something you want to know? Leave a comment below, and I’ll elaborate on it.