Tax Load Spread
02 March 2012
Posted by: SAIT Technical
Tax Load Spread
by Michael Stein
Some interesting, but not entirely surprising, facts emerge from the Budget documents that were made available when the Minister of Finance delivered his Budget speech on 22 February 2012.
The estimated amount of income tax collections from individuals for the 2012/2013 fiscal period is R295 735 million. This amount is expected to come from just 1 313 050 individuals, while a further 4 864 000 individuals will derive taxable incomes that fall below the proposed income tax threshold at which taxable incomes actually result in a liability for income tax, when account is taken of the tax rebates.
More statistics: 1,7% of the individuals who will pay income tax will pay 24,3% of the total income tax, 2,8% will pay 13%, 22,6% will pay 32%, 43,9% will pay 26,5% and 29% will pay 4,3% of the tax collections.
A very small percentage of the total population of South Africa, which I imagine is of the order of 50 million people, pay income tax. In fact, if we assume the population is indeed 50 million people, it turns out that a mere 2,6% of the population will pay all the income tax and just 0,2% of the population will pay 24,3% of the total income tax collected.
These figures reveal how skewed the distribution of wealth is in this country and how a minute proportion of the population pay most of the income tax. But we should not forget that the entire consuming population pays vat and that the poor also bear at least their fair share of this tax.