Africa-Press – South-Africa. South Africa’s tax base is highly concentrated, with 0.1% companies paying over 66% of all corporate income tax in the country.
This means that 1,195 companies pay over R200 billion in tax each year, making corporate income tax the most concentrated form of government revenue in South Africa.
As a result, South Africa’s corporate income tax base is vulnerable to external shocks, as it relies on a relatively small number of companies to generate tax revenue.
This also means the government is unable to raise corporate income taxes, as such an increase is likely to result in lower revenue for the state as companies look to minimise their tax burden.
SARS revealed this in its 2025 Tax Statistics, which are released to inform the government about where its revenue comes from and who pays tax in South Africa.
The data showed that corporate income tax remains the third-largest form of government revenue behind personal income tax and value-added tax (VAT).
However, the proportion of tax revenue coming from corporate income tax has declined over the past decade.
In the 2024/25 financial year, corporate income tax accounted for 17.4% of total government revenue. While this is a slight recovery from the prior two years, it is well below the 26.7% seen in 2008/09.
SARS said the contribution of corporate income tax to overall government revenue has been declining since the Global Financial Crisis in the late 2000s.
It explained that this is largely due to the impact of load-shedding and a stagnant economy on businesses, with very few able to grow their earnings sustainably.
Since 2024, with the sharp decline in load-shedding, corporate income tax receipts have steadily improved. The end of load-shedding has been coupled with increased consumer spending, which has boosted the bottom line of many businesses.
The mining sector, which has historically been the largest contributor to corporate income tax, has come under immense pressure over the past 20 years.
Despite short periods during which commodity booms sent profits soaring, the sector’s overall contribution to tax revenue has been declining.
The financial intermediation, insurance, real estate, and business services sector accounted for over 37% of all corporate income tax in 2024/25.
This makes it the largest contributor of all economic sectors, which is an indication of how much the South African economy has changed over the past two decades.
1,000 businesses pay R200 billion in tax
The concentrated nature of the South African economy and tax base is evident in SARS’ statistics, which show that a tiny proportion of businesses account for most of the tax in the country.
SARS’ data also shows just how much pressure the South African economy is under, with the number of companies registered to pay tax declining by over 500,000 in the most recent financial year.
Corporate income tax collections for the 2024/25 financial year grew by a mere R6.4 billion year-on-year, despite SARS’ intensified collection efforts.
This growth was also largely due to the performance of one sector, the financial services industry. Within this sector, collection is concentrated further in a handful of large businesses, particularly long-term and short-term insurers.
Furthermore, the data showed that the vast majority of South African companies registered for tax do not have a positive taxable income. This means they do not pay tax.
Only 21.7% of companies registered for corporate income tax declared a positive taxable income. 54% had no taxable income, and the remaining 24.3% reported a loss.
As a result, South Africa’s corporate income tax base is highly concentrated by default, with less than a quarter of registered companies paying any tax at all.
Going through SARS’ various corporate income tax groups, the highly concentrated nature of the tax base becomes strikingly clear.
The data shows that only 630 large companies, which make up 0.2% of those with positive taxable income, were liable for 59.6% of the tax assessed.
These companies, on average, have a taxable income of more than R200 million and form the backbone of the South African economy.
Expanding the scope to include the businesses that pay no tax at all, SARS’ data shows that only 1,195 companies pay over 66.4% of all corporate income tax in the country. These businesses have taxable income of over R100 million.
The highly concentrated nature of South Africa’s corporate income tax base can be seen in the graphic below, courtesy of SARS.
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