While no one enjoys being taxed, ignorance of your tax obligations is not a valid excuse to not pay taxes. If you are non-compliant, SARS will still pursue fines, asset forfeiture, and even criminal charges if you fail to pay taxes, whether you were aware you should be paying or not. For that reason, you should know what taxes you may need to pay, as that can be the first step to help you determine how much you should pay in taxes.
List of 17 Crucial Taxes and Levies
The South African Revenue Services has promised to crack down on non-compliance. For the average non-compliant South African, failing to pay taxes isn’t part of a deliberate scheme to prevent SARS from collecting their fair share but rather a lack of knowledge. This list of 17 taxes will introduce you to the taxes you may need to pay.
Seven Crucial Taxes For Businesses
Not every tax on this list will apply to your business, but they give you an idea of what to expect to pay if you are running a company that does business in South Africa.
Air Passenger Tax
International passenger carrier operators, registered agents, or charters are responsible for paying air passenger tax on international flights. Cargo airlines must also register for Air Passenger tax but do not need to pay this tax.
Corporate Income Tax
The standard corporate income tax rate is 27% for company years of assessment ending on or after 31 March 2023. Qualifying small business corporations use graduated rates and must satisfy all statutory criteria, including the gross-income limit; R550,000 is a taxable-income band, not a universal turnover eligibility threshold.
Excise Duty
Manufacturers of high-volume, daily consumable products and certain non-essential items are subject to excise duty. Each product manufactured will be levied separately by SACU member states.
Mineral and Petroleum Royalties
Although individuals can pay this tax, it’s primarily companies that are subject to it. If you hold a prospecting, exploration, mining right or retention or mining permit, a lease, or sublease in respect of such a right, you will be subject to MPR.
Currently, the royalty ranges between 0.5% and 7%, depending on the resource.
Pay As You Earn (PAYE)
The most crucial tax for South African businesses is PAYE. PAYE must be paid on all tax-qualified employees within seven days after the month when PAYE was deducted. The amount levied will depend on the employee’s tax bracket.
Skills Development Levy (SDL)
In an effort to encourage businesses to contribute to learning in South Africa, the revenue service introduced the Skills Development Levy. If your business pays –– or expects to pay –– more than R500 000 in salaries, you will be subject to the 1% levy for total salaries paid.
Unemployment Insurance Fund (UIF)
If you are registered for PAYE, you must also be registered for UIF. An employer will contribute 2% (1% of which will be contributed by the employee’s salary) on any amount up to R17 712 per month or R 212 544 annually.
Ten General Taxes South Africans Pay
You may not need to pay every tax on this list, but if you reside or earn an income in South Africa, you will be subject to one or more of these taxes.
VAT
The standard VAT rate is 15%. Some supplies, including qualifying basic foods and fuel levy goods, are zero-rated. Other supplies, such as qualifying residential rent, educational services and specified passenger transport, are exempt rather than zero-rated. The distinction matters for vendors’ input-tax deductions.
Capital Gains Tax
Capital gains tax forms part of income tax and is levied on any profit from selling property or an investment. For non-residence, the tax only applies to immovable property.
Dividends Tax
As a company shareholder, you are subject to dividend tax at a rate of 20% when you receive dividends.
Donations Tax
Donations tax applies to taxable donations after relevant exemptions. It is generally payable by the donor by the end of the month following the month in which the donation takes effect, unless SARS allows longer. If unpaid in time, the donor and donee can be jointly and severally liable. The rates are 20% on the cumulative taxable value up to R30 million and 25% above R30 million.
Estate Duty
Estate duty is a tax on a deceased estate, generally administered by the executor, rather than a blanket tax on each heir’s inheritance. After applicable deductions and the section 4A abatement, duty is 20% on the first R30 million of dutiable value and 25% above that. The treatment of foreign property depends on the deceased’s residence and the statutory rules.
Customs Duties
Whether you’re importing one item or one thousand items, you will be subject to Customs Duties on the imported items as a measure to protect the local market. Customs are determined by the items’ value, origin, and tariff.
Income Tax
Income tax is the tax you pay to generate income. Beyond income from employment, income tax also covers rental income, profits from a business or trading, royalties, annuities, pensions, capital gains, and directors fees, among others. However, you only need to pay income tax if your income exceeds a certain threshold.
For the 2027 year of assessment, from 1 March 2026 to 28 February 2027, the individual income-tax thresholds are R99,000 for people under 65, R153,250 for ages 65 to below 75, and R171,300 for people aged 75 or older.
Provisional Tax
Provisional tax is not separate from income tax. Instead, paying your income tax beforehand is a way to avoid taxpayers acquiring a large debt.
However, not everyone needs to pay provisional tax; only those who receive income other than remuneration.
Securities Transfer Tax
You may be subject to Securities Transfer tax if you have a share or depositary in a company or an interest in a close corporation. Currently, the rate levied is 0.25% and is paid by the member or participant who transferred the tax.
Transfer Duty
Those who buy property, including mineral rights and shares in a residential property company, will need to pay transfer duty according to the purchase price of the property.
To learn more about how you can pay the taxes you may be subject to, you can visit the SARS website for a list of crucial taxes in South Africa and instructions on how and when to pay them.
