There are different types of taxes that are paid, such as VAT, UIF, Income Tax, Skills Fund Levy, etc.
SARS also collects money on behalf of other departments under its legislation, which is then also paid into the National Revenue Fund.
The reason why SARS collects tax is because without the revenue from tax, the South African Government can't do its job.
The state needs its citizen's tax paid in Rands in order to fund social and economic programmes, and to provide public goods and services, such as schools, universities, hospitals, clinics and roads, as well as defence and security.
Citizens need to register as tax-payers with SARS in order to pay their taxes. Each tax-payers tax rate will differ, but all taxpayers are required to pay their taxes each year; if they do not, they will be subject to penalties and fees.
South Africa has a residence-based tax system, which means residents are, apart from certain exclusions, taxed on their worldwide income, irrespective of where that income was earned.
On the flip-side, non-residents are taxed on their income from a South African source (such as rental income from fixed property situated in South Africa).
Generally, if you earn less than R83,100 annually (less than R128,650 if you're older than 65, or less than R143,850 if you're over 75), you don't have to pay income tax.
Individuals who receive taxable income that is above a specific amount, known as the 'tax threshold' amount, in a year of assessment are liable for income tax.
Income tax is the government’s main source of income and is levied in terms of the Income Tax Act, 1962 [the Act].
South Africans also pay Value- Added Tax (VAT) every time we purchase something from a shop.
VAT was increased from 14% to 15% from 1 April 2018, and is levied on all goods and services subject to certain exemptions, exceptions, deductions and adjustments provided for in the Value-Added Tax Act, 1991.
VAT is levied on the supply of all goods and services rendered by vendors throughout the business cycle and is the government’s second biggest source of income. VAT is also levied on the importation of certain goods and services into South Africa.
The idea of taxes can be a bummer. Taxes help pay for things that benefit everyone, like roads, infrastructure etc. They also allow us to live in a fair and just society where everyone can enjoy benefits and opportunities.
For more information about SARS, visit their website.
