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- Only 6 127 of the 1.17 million new personal income taxpayers in 2022/23 ended up paying pay-as-you-earn (PAYE) tax.
- Many graduates register with SARS to obtain tax numbers but earn below the PAYE threshold of R95 750 a year.
- Meanwhile, SA produces around 200 000 new graduates every year.
- For more financial news, go to the News24 Business front page.
The South African Revenue Service (SARS) collected 8.3% more personal income tax than in the past tax year, boosted by the 7.5% growth in employment numbers and the 5.3% increase in the country's wage bill.
Personal income tax (PIT) still makes up the biggest portion of all the tax revenues SARS collects - at 35.7% or R601.7 billion in rand terms in the 2022/23 tax year. SARS recorded a 4.53% increase in new PIT taxpayers, raising the active taxpayer base to just under 26 million.
But while there were 1.17 million new taxpayers who registered with SARS, only 0.5% of those ended up contributing PIT in the past tax year.
SARS chief revenue officer Johnstone Makhubu said many people register as taxpayers to get a tax number while looking for work or when they start working.
But only a small number earn enough to pay tax, with only 6 127 (of the more than 1 million) ended up contributing PAYE.
This percentage of new taxpayers contributing PAYE is despite the fact that around 200 000 graduates leave SA universities, colleges and other tertiary institutions every year. Many are not absorbed in the labour market for years. And a significant portion of those who do, get into learnerships and internships.
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Those who get absorbed in the labour force must earn more than R95 750 a year to start paying personal income tax.
Not only is SARS dealing with the low number of new taxpayers contributing to PIT, but it's also seen a reduction in the compliance index on personal tax, which declined by 4.5 percentage points.
Makhubu said SARS has picked up a worrying trend among non-salaried people, including self-employed individuals and freelancers. These are provisional taxpayers who file their returns in February and August.
"That's the grouping that we are worried about, and that's where we think the focus will be. We have done much about pay-as-you-earn or salaried people and have around 75% compliance. But the provisional PIT, we have not seen high levels of compliance," said Makhubu.
He said SARS is considering utilising third-party data to strengthen collection in that segment.
SARS recorded 419 617 new corporate income taxpayers in the 2022/23 tax year.
