Taxes payable in South Africa include the following (in alphabetical order):

• Air passenger tax
• Capital Gains Tax (CGT)
• Customs duty
• Donations Tax
• Environmental Levy
• Estate duty
• Excise duty
• Fuel levy Income
• Pay As You Earn Tax (PAYE)
• Provisional Tax Retirement Funds Tax (RFT)
• Skills Development Levy (SDL)
• Stamp duty
• Transfer duty
• Uncertificated Securities Tax
• Unemployment Insurance Fund
• Value Added Tax (VAT)
• Other taxes

Income Tax is imposed on taxable income, meaning gross income minus exemptions and allowable deductions. Income tax is imposed on residents' worldwide income, with appropriate release to avoid double taxation. Companies are taxed at a rate of 29%. In addition to this, secondary tax (STC) is imposed on companies at a rate of 10% on all income distributed by way of dividends. Small-business corporations (those with an annual turnover of less than R14-million) benefit from a graduated tax rate of 0% on the first R43 000 taxable income, 10% from R43 001 to R300 000 taxable income and R25 700 + 29% in excess of R300 001 taxable income, and can write off certain investment expenditure in the year in which it is incurred.

Pay As You Earn (PAYE), SITE, Employees' tax:

Employees' tax is deducted during the tax period. SITE is the portion of employees' tax that is applicable only on the annualised net remuneration up to R60 000. The determination of SITE is done at the end of the tax period and may represent only a portion of the employees' tax deducted during the year. The balance of employees' tax after excluding the SITE portion and including employees' tax on remuneration other than net remuneration represents PAYE.

Retirement Funds Tax (RFT) is levied on the gross interest, net rental and foreign dividend income of retirement funds - in other words, pension, provident, retirement annuity funds.

Capital Gains Tax: forms part of the income tax system and includes taxable income capital gains made on the disposal of assets.

Value Added Tax (VAT) is applied at a standard rate of 14% on all goods and services subject to certain exemptions. VAT is imposed on the supply of all goods and services rendered by registered vendors and on the importation of goods and services into South Africa.

Customs duty is charged when goods are imported into or exported from South Africa. They are paid by the importer or exporter. All goods and gifts that have been acquired abroad are subject to payment of customs duty (as well as VAT) when they are brought into the country. This includes goods purchased duty-free on board aircraft and ships, or in duty-free shops (above the established duty-free allowance). 

Excise duty is imposed on certain locally manufactured goods as well as on their imported equivalents. This duty is levied as a specific duty on tobacco and liquor, on cosmetics, televisions, audio equipment and motor cars. Relief from excise duty is available where excisable products are exported. Relief is also available on specific farming, forestry and certain manufacturing activities.

Transfer duty is payable by individuals when they acquire property at progressive marginal rates between 0% and 8%. When property is acquired by a company or trust, transfer duty is payable at a rate of 10%. All transactions relating to a taxable supply of goods that are subject to VAT are exempt from transfer duty.

Estate duty is imposed on all property of the deceased - including deemed property, such as life-insurance policies and payments from pension funds - wherever situated. However, the estate of a deceased non-resident consists only of his or her South African assets. The duty, at a rate of 20%, is calculated on the dutiable amount of the estate. Certain admissible deductions from the total value of the estate are allowed.

Stamp duty is charged on leases of fixed property.

Skills Development Levy (SDL) is a compulsory levy scheme for the funding of education and training. SARS administers its collection. The rate is 1% of a payroll and is payable by employers who are registered with SARS for employees' tax purposes, or employers who have an annual payroll in excess of R250 000. As from 1 August 2005, the amount of R250 000 has increased to R500 000.

Unemployment Insurance Fund (UIF) provides short-term relief to workers when they become unemployed or are unable to work because of maternity or adoption leave, or illness. This includes domestoc workers. For more information see our UIF section.

Air passenger tax is payable by fee-paying passengers departing on international flights in the amount of R120. Passengers flying to Botswana, Lesotho, Namibia and Swaziland pay R55.

Donations Tax is tax payable on the value of property disposed of by a resident by means of a donation.

Fuel Levy is a specific excise tax imposed by the Customs and Excise Act 91 of 1964.

Environmental Levy is essentially a tax on certain types of plastic shopping bags. It aims to encourage the sustainable use of these bags, which have a harmful effect on the environment.

Other taxes include provincial gaming taxes. Local governments also finance the cost of municipal services by charging rates on the value of fixed property.

Source: South African Revenue Service

Last updated: September 24, 2008