Tax Freedom Day this year falls 10 days later than in 2021 and four days later than the year before
On Thursday May 12, South Africans stop working for the state and start working for themselves. That day is Tax Freedom Day, and this year it falls 10 days later than in 2021 and four days later than the year before. This is probably the largest year-on-year jump we have seen since 1994.
To calculate this estimate of Tax Freedom Day we first estimate general government revenue by multiplying the planned central government budget as a percentage of GDP by 1.3, and then multiplying the result by the number of days in a year and adding a day. In his recent budget speech the finance minister made a lot of encouraging noises about reducing SA’s enormous debt and the huge burden imposed by state-owned enterprises . If that comes to fruition it would make Tax Freedom Day earlier and be a great boon to the country, considering that paying interest on debt and bailing out SOEs amount to 9.9% of GDP and 27.7% of general government revenue.
SA has an exceptionally large tax burden for the size of its economy. It has the 12th-highest income tax burden, the 9th-highest company tax burden, the 77th-highest indirect tax burden , and the 14th-highest non-resource tax burden. SA also has an exceedingly small tax base that is forced to carry an excessive share of the cost, and therefore is being strongly encouraged to leave.
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