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Almost all of South Africa’s revenue — 98% — comes from taxes. Personal income tax contributes 40%, followed by value-added tax (VAT) at 25% and corporate income tax at 17%.
In his 2025 budget, Finance Minister Enoch Godongwana announced an unpopular increase in the VAT rate. He had to adjust it down from an initial 2 percentage point rise – which would have raised VAT from 15% to 17% – to a compromise 1 percentage point, split over two years.
‘Increasing corporate or personal income tax rates would generate less revenue, while potentially harming investment, job creation and economic growth,’ he explained.
VAT is seen as a tax on the poor. ‘Dropping the proposed VAT-rate increase from 2% to 0.5% [the increase for 2025] still hurts people and still hurts the economy,’ said Mervyn Abrahams of the Pietermaritzburg Economic Justice & Dignity Group, which monitors low-income families’ household expenses.
Get the data used in this chart on DataDesk
In his 2025 budget, Finance Minister Enoch Godongwana announced an unpopular increase in the VAT rate. He had to adjust it down from an initial 2 percentage point rise – which would have raised VAT from 15% to 17% – to a compromise 1 percentage point, split over two years.
‘Increasing corporate or personal income tax rates would generate less revenue, while potentially harming investment, job creation and economic growth,’ he explained.
VAT is seen as a tax on the poor. ‘Dropping the proposed VAT-rate increase from 2% to 0.5% [the increase for 2025] still hurts people and still hurts the economy,’ said Mervyn Abrahams of the Pietermaritzburg Economic Justice & Dignity Group, which monitors low-income families’ household expenses.
Get the data used in this chart on DataDesk