South Africans will have worked 141 days this year to pay their taxes to the government as the country takes longer to achieve its tax freedom day (TFD), which this year fell on Thursday, 22 May.
TFD is the day citizens have worked long enough to pay their taxes for the year, and in 2014 this is 13 days later than last year and some five weeks later than in 1996, making it the latest date in the nation's history.
South Africans pay 38.6% of their income on tax, and it is interesting to note that for the 2013/14 financial year, R899.7bn was given in taxes and only R270bn was spent on clothing, food and beverages.
However, the government had taken steps to alleviate the tax burden in the past decade, such as reducing corporate income tax from 40% to 28%, and the top marginal rate for personal income tax was reduced from 45% to 40%.
Be grateful you don't work in Sweden
While analysts say that the later TFD date has arisen as a result of an "election budget", among other factors, research by financial services company Direct Axis shows that South Africans are still reasonably placed when compared with other nations.
In Sweden, for example, tax freedom day fell on 4 July last year, meaning that country's citizens worked almost half the year for the government.
Last year the UK (30 May), France (19 June) and Italy (7 June) also took longer to achieve their respective tax freedom days.
Analysts say the only way for government to fund its spending is to raise taxes, one of the main reasons why TFD is occurring later each year.
The Direct Axis research shows that of this year's R1.25trn budget in South Africa, education will take the biggest slice (R253.8bn).
General public services will be allocated R180bn, and health R145.7bn.
What is also interesting is that tax revenue increased from R113.8bn in 1994 to R899.7bn for the last year, and tax revenue is estimated to be R1,099bn for the next year.
For further information, visit www.directaxis.co.za
Posted on 23 May 2014 13:36