American comedian Christopher Titus is quoted as saying: “Born free, taxed to death.” This is a bitter pill to swallow if you are part of (according to the latest National Treasury report) only about 2,1 million of registered South African taxpayers who will pay tax in the 2019/2020 season.
Where does it go?
Tax contributions form part of the government’s funds collected by the South African Revenue Service (Sars) – a body responsible for ensuring that all working citizens contribute fairly towards this every year. According to Pumla Zondo, a tax specialist and chartered accountant, “Through this collection, the government is able to fund various public systems – making sure that facilities such as government schools, hospitals, road infrastructure as well as other social services and grants continue to be subsidised.”
Who pays and who's exempt?
“If you earn an income, be it a fixed salary, commission, bonuses or income from any business you have – then you qualify to pay tax,” Zondo explains. According to tax director at JDX & Partners Tax Practice, Lesedi Seforo, your age is also a deciding factor. There are certain age groups — who earn a certain income — who are free from paying income tax. These include:
Those younger than 65 years of age, who earn less than R79 000 per year (R6 500 per month); between 65 and 75 years of age, who earn less than R122 300 per year (R10 191 per month); and those who are 75 years and above, who earn less than R136 750 per year (R11 395 per month).