Types of Tax in South Africa

Currently, South Africa has 21 types of Taxes. Some tax types have been repealed such as Security Transfer tax and Uncertificated Securities Tax. Here’s a list of all taxes we pay in South Africa.

• Air passenger tax
• Capital Gains Tax (CGT)
• Corporate Income Tax
• Customs Duties
• Diamond Export Levy
• Dividends Tax
• Donations Tax
• Estate duty
• Excise duty
• Income Tax
• Mineral and Petroleum royalties
• Pay As You Earn (PAYE)
• Provisional Tax
• Securities Transfer Tax*
• Skills Development Levy (SDL)
• Stamp duty
• Transfer duty
• Uncertificated Securities Tax*
• Unemployment Insurance Fund (UIF)
• Value Added Tax (VAT)
• Withholding Tax on Interest

Air passenger tax

This type of tax is not applicable to domestic flights. It is applicable to chargeable passengers leaving on an international flight. This was announced by Minister of Finance in 2000 for the tax to be instituted on chargeable passengers on a chargeable aircraft departing from an airport in the Republic to a a destination outside the Republic.

Capital Gains Tax (CGT)

This type of tax is not a separate tax but it does form part of the income tax. It is taxed at a lower effective tax rate than ordinary income tax. CGT applies to individuals, trusts, and companies. Most people such as those who receive retirement funds are excepted from the CGT fully.

Corporate Income Tax

This type of Tax is often refereed to as CIT

The Corporate Income Tax often referred to as CIT is a tax that is set forth authoritatively as obligatory on RSA companies incorporated under the laws which are efficaciously managed in SA and obtain income from within or outside South Africa.

Customs Duties

This type of tax is levied on imported goods with the aim of raising revenue and protecting the local market. it is the percentage value of the goods.

Diamond Export Levy

This type of taxation on unpolished diamonds exported from South Africa was introduced on 1 November 2008. Even though this is legislated in the Diamond Export Levy Act, SARS is still mandated to administer and collect this levy.

Dividends Tax

The dividend is part of the earning of a corporation that is distributed to its shareholders; this excludes the return of contributed tax capital. However, dividends tax is a tax on shareholders when the dividends are paid to them, which in essence are withheld by an agent or where a regulated intermediary is involved.

Donations Tax

A donation can be described as any gratuitous disposal of property without the person receiving the donation giving anything in return.

Estate duty

When a person dies, the deceased person’s property is place in an estate, this is usually referred to as deceased estate. Estate Duty is levied on the worldwide property and deemed property of a natural person who is ordinarily resident in South Africa and on South African property of non-residents according to SARS.

Excise duty

This type of taxation is focused on high-volume daily consumable products such as alcohol, petroleum and tobacco. This is payable by manufacturers and are levied through SACU (South African Customs Union).

Income Tax

This is the normal tax taxable from a person’s income. It can be a remuneration, profits or losses from a business or trade, income received by a beneficiary, Director’s fees, Investment Income, Royalties, Annuities, Pension income, and certain capital gains.

Mineral and Petroleum royalties

This is often referred to as MPRR – Royalties earned through MPRR are taxable and triggered on the transfer of a mineral extracted in South Africa.

Pay As You Earn (PAYE)

PAYE stands for (Pay As You Earn) which is the amounts deducted that should be paid to SARS by the employer on a monthly basis. Employers complete an EMP201 (Monthly declaration form) declaring the total payment together with the allocations for PAYE, SDL, UIF, and/or (ETI), if applicable.

This means you have a unique PRN (Payment Reference Number) used as a reference. If you are registered for PAYE, SARS will assume you are still working, hence it’s very important to keep your information updated with SARS and the Department of Labour.

Provisional Tax

This is not a separate tax from the income tax, provisional tax is a method of paying the income tax liability in advance to ensure the taxpayer does not remain with a large tax debt on assessment.

Securities Transfer Tax*

This type of taxation has been repealed and it was levied on every transfer of a security.

Skills Development Levy (SDL)

This levy is imposed to encourage learning and development in SA and is determined by an employer’s salary bill. The funds are used to develop and improve employees’ skills.

Stamp duty

“The Stamp Duties Act, 1968 (Act No. 77 of 1968) was repealed with effect from 1 April 2009. It should be noted that all lease agreements executed on or after to this date are not liable to Stamp Duty.”

Transfer duty

This type of taxation is levied on the value of any property acquired by any person by way of a transaction or in any other way.

Uncertificated Securities Tax*

Uncertificated Securities Tax Act, 1998 was replaced by the Securities Transfer Tax Act, 2007.

Unemployment Insurance Fund (UIF)

UIF Stands for Unemployment Insurance Fund, this applies only to unemployed people (people who just got laid-off), and or those who are unable to work, because of maternity, illness or adoption leave. In the unfortunate event that the contributor is deceased, dependents will also get the UIF.

Value Added Tax (VAT)

VAT stands for Value-Added Tax and it has always been regarded by its abbreviation ‘VAT’ which is an indirect tax through the consumption of goods and services in our economy.  VAT funds or the revenue thereof is raised by certain businesses for the government. Eligible businesses should register and charge Value-Added Tax on taxable supplies of goods and services.

Withholding Tax on Interest

The WTI is a tax charged on interest paid (on or after 1 March 2015) by any person to or for the benefit of a foreign person (which includes individuals, companies, etc.) from a source within South Africa.