National Treasury’s data about registered taxpayers and taxable income revealed that only 2 million South Africans pay 80% of all personal income tax.
It further revealed that 113,000 individuals, or 1.6% of registered taxpayers, who earn over R1.5 million per year pay 27% of all personal income taxes.
The problem for South Africa is that some of these individuals are leaving for countries like the UK, Australia, New Zealand, and America. As a consequence, a shrinking number of individuals must support a growing number of social grant recipients. Clearly, the tax burden is getting heavier on a smaller number of individuals.
Inequality is mainly a result of the high unemployment rate, and, as many have said over the years, the only way to improve the situation is to grow the economy and create new jobs – a great many of them.
This article has been adapted from a piece which originally featured in Daily Investor