TEL: 011 475 8888
FAX: 086 609 1613

Taxes in South Africa: Where do they go?

Written by Anni-Mari van Wyk

On Sep 7, 2020

With the income tax deadline looming, you may be wondering where all your tax money is going and how they are utilised in South Africa.

Taxes are levied and used to finance government activities. In economics, taxes fall on whomever pays the burden of the tax, whether this is the entity being taxed, such as a business, or the end consumers of the business’ goods.

The taxes are also used to help fund public works and services—and to build and maintain the infrastructures used in a country. The tax collected is used for the betterment of the economy and all living in it.

 In South Africa and many other countries in the world, taxes are applied to some form of money received by a taxpayer. The funds could be income earned from salary, capital gains from investment appreciation, dividends received as additional income, payment made for goods and services, etc.

Practical ways the government uses your tax money:

  1. Pay debt – With all that has been happening around us, the government has had to apply for relief funds from other countries and facilities such as the World Bank. Taxes levied on citizens also contributes to paying off the national debts.
  2. General public services
  3. Social protection
  4. Public order and safety
  5. Economic affairs
  6. Housing and community amenities
  7. Education
  8. Defense
  9. Health
  10. Recreation, culture and religion
  11. Environmental protection

Although there has been a lot of controversy around the corruption in our government and how the tax payer’s money is being misused, let us not forget the good the comes out of paying taxes. Our roads are being maintained, public servants at lower municipalities are getting paid, public schools are also benefiting from taxes.

Your contribution does go a long way. Always pay your taxes on time.

Contact me directly on am@cvwab.co.za for more on how to prepare for tax season.

You May Also Like…

VAT: What is it and how does it work in South Africa?

VAT: What is it and how does it work in South Africa?

I’m sure we have all heard of the term VAT but do we all understand and know how it works? Tax is not an easy topic to cover because there is vast information to know and understand thoroughly; especially when it comes to business owners. Value-added tax (VAT) was...

Beware of SARS Auto-Assessment Links

Beware of SARS Auto-Assessment Links

We’re living in a world of convenience and technology, but now we are advised to not look for comfort in the wrong places, especially when it comes to our taxes. The South African Revenue Service (SARS) has begun to auto-assess individual taxpayers which could lead...

Save More on Taxes by Working Remotely…

Save More on Taxes by Working Remotely…

The “new norm” has brought many changes and challenges but we cannot overlook the great benefits this new way of living has brought. Remote working has made life much simpler for the working groups and luckily, it comes with cost saving benefits including taxes....

0 Comments