In many a discussion and article about the tax burden in South Africa, figures are bandied about regarding the actual number of taxpayers in the country. The latest figure that the South African Revenue Service (SARS) likes to use is 13,7 million, while "five million" is often heard during everyday conversations. In actual fact, the figure is closer to 2,3 million, or even as low as 1,5 million taxpayers.
To determine the actual number of taxpayers in South Africa, certain things have to be placed in context first. In the 2011 tax year (March 2011 to February 2012), the most recent year for which figures are available, personal income tax represented just 33,7% of the state's tax revenue. Company tax accounted for 20,4%, value-added tax (VAT) for 27,2% and taxes like the fuel levy and import tariffs made up the remaining 18,7% of tax revenue. However, it is important to bear in mind that the people who pay income tax are also, to a very large extent, responsible for paying the other types of tax.
Company tax is, for example, by no means a tax on companies - it's a tax on the owners and employees of companies. Company shareholders are individuals and so are the employees. These individuals would have received the higher returns from the company's activities if it hadn't been swallowed up by company taxes. To a great extent, shareholders and employees of companies are the very same people who pay income tax.
The same goes for other taxes like import tariffs and fuel levies. The people who buy most of the products that are subject to these taxes are also largely the people who pay income tax. With respect to VAT, the tax burden probably leans a bit more towards people who don't earn enough to pay income tax, but not as much as might be expected, because of their low purchasing power. Moreover, numerous basic foodstuffs are not subjected to VAT. Low-income individuals tend to spend large portions of their income on these products - which is precisely why no VAT is levied on these products.
Exact calculations are not possible, but it can reasonably be accepted on the strength of the abovementioned grounds that the same people who are responsible for 33,7% of the state's tax revenue by paying income tax are by far the main contributors in respect of other taxes as well. In other words: There is a strong, positive correlation between the amount of personal income tax and the amount of other tax a person pays.
In analysing the latest income tax statistics, the first figure that stands out is the 10,3 million people who were registered as taxpayers for the 2011 tax year. For the 2012 tax year, the figure is 13,7 million. In 2008, this figure was approximately 5,2 million, which is the likely source of the popular "five million taxpayers" figure. People who have been referring to "five million taxpayers" until now should therefore actually adjust the figure to 13,7 million.