Question NW3883 to the Minister of Finance
11 December 2023 - NW3883
Nolutshungu, Ms N to ask the Minister of Finance
What measures have been put in place to ensure that the average working class has more money in their pockets than what they are paying to the Government in taxes, because their contribution made to the fiscus is not matched by the services they receive from the State?
Reply:
The South African income tax system is progressive, meaning that taxpayers who earn more pay a higher rate of tax than those who earn less. Consequently, taxpayers at the lowest tax brackets get to take home a larger portion of their income after tax than those at the higher income tax brackets. For example, taxpayers who earn less than R 95 750 per annum (for those below 65 of age) fall below the tax threshold, meaning they keep 100 per cent their income after tax. In contrast, those who earn in excess of R 1.817 million per annum have to pay 45 per cent tax on their earnings above that amount. The majority of income tax revenue is collected from the higher income brackets. The tax brackets below indicate at which percentage each income group is taxed. South Africa’s graduated income tax scale ensures that there is progressivity and equity in the tax system.
Income tax brackets for 2023/24
|
Taxable Income |
Rates of tax |
|
R0 - R237 100 |
18% of each rand |
|
R237 101 - R370 500 |
R42 678 + 26% of the amount above R237 100 |
|
R370 501 - R512 800 |
R77 362 + 31% of the amount above R370 500 |
|
R512 801 - R673 000 |
R121 475 + 36% of the amount above R512 800 |
|
R673 001 - R857 900 |
R179 147 + 39% of the amount above R673 000 |
|
R857 901 - R1 817 000 |
R251 258 + 41% of the amount above R857 900 |
|
R 1817 001 and above |
R644 489 + 45% of the amount above R1 817 000 |
Over the 2024 MTEF period, 61 per cent of consolidated non-interest spending goes to the social wage towards healthcare, education, social protection, community development and employment​.