Tax

Why we pay tax and types of tax in SA

Tax in South Africa

Tax is money collected by SARS (South African Revenue Service) to fund government services. Types include: income tax (from salaries), VAT (15% on purchases), company tax (from business profits) and customs duty (on imports). Everyone who earns or spends money contributes to tax.

Example

Types of Tax in SA

• Income tax: percentage of your salary (more you earn, more you pay) • VAT (15%): included in the price of most goods • Company tax (27%): businesses pay tax on profits • Fuel levy: tax added to petrol and diesel price • Sin tax: extra tax on cigarettes and alcohol Basic foods (bread, milk, eggs, vegetables) have NO VAT — to help the poor

Note

Remember

Tax is not optional — it's a legal obligation. In return, we get schools, hospitals, roads, police and social grants. Tax evasion (not paying tax) is a crime. Citizens should hold government accountable for using tax money properly (no corruption!).

Key Vocabulary

TaxCompulsory payment to government for public services

SARSSouth African Revenue Service — collects tax

VATValue Added Tax — 15% on most goods and services

Income taxTax paid on money earned from work or investments

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Tax

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