17,5million social-welfare citizens; only 3,5m taxpayers

16-million of the 51-million South Africans now survive solely on social welfare — and soon this will be 17,5 million people. By 2014 these welfare-recipients may well be costing the taxpayers more than R116billion – but SA only has 3,5million taxpayers who contribute above 87% of all taxes.This small but crucial group of taxpayers is thus increasingly burdened with South Africa’s lavish social welfare budget.

Moreover, the SA State encourages heavy political pressure to be placed on this small taxpayer group – many of whom are business people — with calls to nationalize all the remaining private properties, with the slogan ‘economic freedom in our lifetime’

Buying votes for the ANC

Political analysts often also view the social-welfare budget as a  ‘vote-buying’ device to keep the ruling African National Congress party in power, since 98% of all its recipients are blacks. And a major problem also remains: the high level of social-welfare fraud. 

Rising taxes

In the 2010/2011 fiscal year the SA revenue service said it collected R674 billion in tax revenue link

In the 2009 fiscal year the SA revenue service collected R154.1 billion in tax revenue mostly from 3,5 million taxpayers link

June 28 2013  Independent Newspapers reporter Michelle Jones michelle.jones@inl.co.za  writes from Cape Town that in the 2013/14 book year, more than 16-million of the 51-million South Africans are already living on social welfare. And, the ANC-regime also warned, that 2,1million children still have to be added to the budget.

Who is going to pay for it?

We insert this important note – namely the fact that the number of taxpayers far outnumber the social-welfare recipients. Solidarity Research Institute has found that by 2011/11, about 2,1million people already paid 92% of all the income tax, and 1,4million paid 82% of all the income tax. In the 2010/2011 fiscal year the SA revenue Service said it collected R674billion in tax revenue…

TaxpayersSouthAfricaHowManyAreReallyContributingSolidarityInstituteJoubertMarch2012  It can be seen from the above 2010/2011 taxpayer comparisons, that the number of taxpayers who contributed the most taxes did not rise very much from 2009, when there still were 3.5 million assessed taxpayers (with a total taxable income of R632.6 billion), of that they were liable to pay R154.1 billion. Of them 28.8% were between 35 to 44 years old and 56.7% were male, 3.9% (136,124) of them had business income. Although the number of tax payers has increased from previous years, most taxpayers fell below the R120,000 taxable income threshold and so were not required to submit an income tax return and were therefore not included in the 3.5 million assessed taxpayers. In 2009, R154,1billion was paid to the SARS in income tax. The following year, they claimed they gathered R674 billion, basically from the same taxbase. “2010 Tax Statistics – Highlights”. SARS. 2010 p://www.sars.co.za/Tools/Documents/DocumentDownload.asp?FileID=66375 and http://www.mises.co.za/2012/03/how-many-taxpayers-are-there-really/

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Since 2010, the number of people on social welfare clearly also far outnumber people with actual jobs in South Africa, the research by the South African Institute of Race Relations revealed.

The SAIRR compared  employment data from the South African Social Security Agency Sassa with the number of people who receive social grants.  It was found that ever since 2010,  for every 100 people on social welfare just 90 people were employed.  The number of South Africans on social grants had increased by more than four times in the last decade, while the number of employed people had remained almost constant.

  • In 2009 there were were 3.5 million assessed taxpayers with a total taxable income of R632.6 billion of which they were liable to pay R154.1 billion. Of them 28.8% were between 35 to 44 years old and 56.7% were male, 3.9% (136,124) of them had business income. Although the number of tax payers has increased from previous years, most taxpayers fell below the R120,000 taxable income threshold and so were not required to submit an income tax return and were therefore not included in the 3.5 million assessed taxpayers
  • This shows a dramatic rise since 2001: for every 100 people who were receiving social grants, 330 people still had jobs in 2001.

In 2014 the SA social grant expenses are expected to rise above R113 billion.

Assa said in a press release: “The highest proportions will be spent on old-age pension and child support grant transfers, at 39 percent and 37 percent respectively. And that excludes an estimated 2.1million children who are eligible, but are not receiving grants. “If all eligible children received this grant, it would push social grant expenditure up by more than half a billion rand” read the release. http://www.iol.co.za/news/south-africa/more-people-on-welfare-than-working-1.1539021#.Uc6F9NhBPGg

Value of individual social grants per month, 2013/14:

Old-age pension:     R1,260

War veterans:           R1,280

Disability:                  R1,260

Foster care:                 R800

Care dependency:  R1,260

Child support:             R290

Grant-in-aid:                R290

And this heavy expenditure on social welfare in a society where unemployment has doubled since  the end of apartheid in 1994, puts a heavy strain on the country’s tax base.

How Many Taxpayers Are Contributing the Most?

  • Paul Joubert, researcher at the Solidarity Research Institute, wrote on March 27 2012: “About 3,2 million people were responsible for payment of 99% of all income tax in 2010/11. Approximately 2,1million people paid 92% of all income tax and 1,4million people paid 82% of all income tax.…  In fact, South Africa has only approximately 3,2million taxpayers and, strictly speaking, between only 2,1million tor 1,4 million pay truly significant amounts of tax. “Concerned citizens who claim that there are only five million taxpayers in South Africa are incorrect, but the real figures give even greater cause for concern.” http://www.mises.co.za/2012/03/how-many-taxpayers-are-there-really/

SASSA acting head Lerato Moloi also warned: “South Africa’s tax base will not grow fast enough to keep supporting the millions of vulnerable individuals who rely on monthly cash transfers from the State.”Moloi also added, writing in the institute’s most recent Facts publication, that ‘while the state continued to push money into social services, particularly social grants, the budget deficit continued to grow. Moreover, “the money invested in free schooling also does not seem to be improving the quality of education, which would produce skilled employees and in turn, contribute positively to the economy,” she noted.

Finance Minister Pravin Gordhan –  in his Budget speech earlier this year –  also said that ‘spending on social assistance would reach R120bn next year (…) but that it was not a substitute for job creation.”

Above was based on articles:

2010/2011 fiscal year:

2009:

  • It can be seen from the 2010/2011 taxpayer comparisons, that the number of taxpayers who contribute the most taxes did not rise from 2009 – but this small group also paid dramatically higher taxes when they reached 2010. In 2009, there still were 3.5 million assessed taxpayers with a total taxable income of R632.6 billion, of that they were liable to pay R154.1 billion. Of them 28.8% were between 35 to 44 years old and 56.7% were male, 3.9% (136,124) of them had business income. Although the number of tax payers increased from previous years, most of these taxpayers fell below the R120,000 taxable income threshold and so were not required to submit an income tax return and were therefore not included in the 3.5 million assessed taxpayers for that year. “2010 Tax Statistics – Highlights”. SARS. 2010 http://www.sars.co.za/Tools/Documents/DocumentDownload.asp?FileID=66375

About Adriana Stuijt
Retired South African-Dutch journalist formerly Sunday Times Johannesburg

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