A common complaint amongst South Africa’s tax-paying citizens is our high tax rate when compared to the rest of the world. We aren’t saying this is not true (South Africa rated as the country with the 12th highest personal income tax rate in 2018), but we want to clarify how the SARS tax brackets work and what your effective tax is for each. South Africa applies a sliding scale to determine the relevant tax rate. This isn’t the case in some other countries where a fixed rate is applied.
I’ve replicated the 2020 Rates of Tax for Individuals below. Feel free to download it and play around. I’ve added the last three columns to give you an indication of your effective tax rate, which is normally much lower than your tax bracket rate. This is further reduced by your tax rebates, e.g. for the 2020 tax year the rebate is R14,220 for individuals younger than 65 years of age.
2018 – 2019 Tax season reminder
Just a reminder that, if you are an individual, your annual tax filing for the 2019 Tax Year (1 March 2018 to 28 February 2019) should be finalised by 4 December 2019. If you’re registered for eFiling it should have been finalised by 31 October 2019. Provisional taxpayers have until 31 January 2020.
If you’re freaking out because it won’t be done in time, there’s no need to panic (we hope), as SARS will only levy a non-compliance penalty if you’re two years behind on your tax filing.