https://en.sputniknews.africa/20250106/south-africa-loses-162-million-in-tax-revenue-as-thousands-end-tax-residency-1070062528.html
South Africa Loses $162 Million in Tax Revenue as Thousands End Tax Residency
South Africa Loses $162 Million in Tax Revenue as Thousands End Tax Residency
Sputnik Africa
In the 2023/24 fiscal year, tax revenues were mainly affected by slow economic growth, South African Revenue Service reported. VAT growth was slow because of... 06.01.2025, Sputnik Africa
2025-01-06T15:21+0100
2025-01-06T15:21+0100
2025-01-06T15:21+0100
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In its annual tax statistics for 2024, the South African Revenue Service (SARS) reported a R3 billion (about $162 million) loss in potential tax revenue as approximately 38,000 taxpayers ceased their South African tax residency.The data revealed a sharp decline in taxable income and tax collected from these individuals. In 2014, nearly 45,000 taxpayers declared a taxable income of R21.6 billion ($1.2 billion), yielding R6.2 billion ($335 million) in taxes. By 2023, this figure had dropped to 37,584 taxpayers declaring R9.9 billion ($535 million) in taxable income, with only R3.2 billion ($173 million) in tax collected—a nearly 50% reduction. Wealthier individuals, particularly males aged 35 to 44, account for much of the decrease.SARS noted that younger and middle-class taxpayers are increasingly joining the exodus, with those declaring zero or negative taxable income rising by an alarming 575.9% between 2014 and 2023. This demographic shift highlights an emerging trend where not only millionaires but also younger South Africans are choosing to cut tax ties with the country.Although SARS continues to tax South African-sourced income for those who renounce their tax residency, the long-term implications of this trend are troubling. According to local media, experts warn that this outflow of taxpayers could leave a lasting mark on the nation’s economy, especially as many high-income individuals have already exited the system, potentially signaling fewer remaining opportunities to recover lost revenue.
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south africa, southern africa, taxes, economy, youth, finance
south africa, southern africa, taxes, economy, youth, finance
South Africa Loses $162 Million in Tax Revenue as Thousands End Tax Residency
Christina Glazkova
Writer / Editor
In the 2023/24 fiscal year, tax revenues were mainly affected by slow economic growth, South African Revenue Service reported. VAT growth was slow because of financial pressures on consumers from high interest rates. However, the SARS compliance program added R260.5 billion ($14.1 billion), a 25.5% increase from the previous year.
In its annual tax statistics for 2024, the South African Revenue Service (SARS)
reported a R3 billion (about $162 million) loss in potential tax revenue as approximately 38,000 taxpayers ceased their South African tax residency.
The data revealed a sharp decline in taxable income and tax collected from these individuals. In 2014, nearly 45,000 taxpayers declared a taxable income of R21.6 billion ($1.2 billion), yielding R6.2 billion ($335 million) in taxes. By 2023, this figure had dropped to 37,584 taxpayers declaring R9.9 billion ($535 million) in taxable income, with only R3.2 billion ($173 million) in tax collected—a nearly 50% reduction. Wealthier individuals, particularly males aged 35 to 44, account for much of the decrease.
SARS noted that younger and middle-class taxpayers are increasingly joining the exodus, with those declaring zero or negative taxable income rising by an alarming
575.9% between 2014 and 2023. This demographic shift highlights an emerging trend where not only
millionaires but also younger South Africans are choosing to cut tax ties with the country.
Although SARS continues to
tax South African-sourced income for those who renounce their tax residency, the long-term implications of this trend are troubling. According to local media, experts warn that this outflow of taxpayers could leave a lasting mark on the nation’s economy, especially as many high-income individuals have already exited the system, potentially signaling fewer remaining opportunities to recover lost revenue.
