SARS (The South African Revenue Service) is responsible for collecting duties, tariffs, taxes and all other manner of revenue levied by the South African government. It also manages all imports and exports.
The past decade has seen a lot of growth and change within SARS. It’s switched from a source basis to a residence basis of taxation, which has resulted in a large chunk of extra change for the South African government, given the number of foreign remittance workers and temporary residents in the country.
It’s also lowered company tax rates from 50% to 29%, removed transactional taxes on debit entries, increased tax thresholds and exemptions for small businesses (even allowing for tax exemptions) and provided enhanced scholarship and bursary offerings for disabled and underprivileged learners.
The guiding principle of these actions is one that favors the underdog, rather than big business. Only about 28% of the country even needs to register for tax, as most residents fall below the R112500 per annum mark, and are thus only charged tax by their employers. SARS is also working to continuously simplify its registration and tax payment procedures in order to make them more accessible to the average person.
Nonetheless, there are some processes and terms in local tax law that may be confusing to the uninitiated. The following sections outline the essentials of income tax and various other taxes. For more details on fixed property taxes, take a look at ‘Purchasing’ in the Accommodation section.