A latest deep dive into South Africa’s tax revenue methodology makes a sound argument for SASSA grant beneficiaries being exempt from tax. By the same rationale, government employees should be exempt from tax, too. But why exactly?
According to the latest tax revenue figures from the South African Revenue Service (SARS), the country generated R1.1 trillion in 2024/2025. Of that, R267 billion was generated through personal income tax (PIT) and value-added tax (VAT) of SASSA grant recipients and government employees.
SASSA RECIPIENTS TO BE EXEMPT FROM TAX?
There is a perfectly sound argument that this amount going to SASSA beneficiaries and government employees should be exempt from tax. Roughly one quarter of South Africa’s tax revenue is money the government pays out as it sees fit and then re-appropriates back to itself, reports Daily Investor.
Therefore, economists and financial experts believe that government employees and SASSA grant recipients could just as well be exempt from tax. The argument being it’s ‘inefficient and wasteful’ to pay SASSA grants using tax collections, only to tax a portion of the funds back into the fiscus. As of 2025, roughly 45% of the country’s population receives a government grant of some sort. This accounts for the second highest spend of national budget, after debt servicing.
WHAT’S THE DOWN-SIDE?
However, the complexity and potential for fraud is ultimately what experts say makes this approach largely unfeasible. While SARS collected R1.1 trillion total revenue in 2024/2025, R762 billion was shelled out to SASSA grant recipients and government employees.
At a personal income tax rate of 21.3%, government employees were responsible for R162 billion income generation. This is roughly 25% of all revenue received. Combined with VAT, the amount payable is more than R100 billion. This means government employees and social grant recipients are responsible for around 23% of all VAT receipts. While private consumption accounts for 77%.
PERSONAL INCOME TAX (PIT)
- Total Personal Income Tax in 2024/2025 – R651 400 000 000 (100%)
- Private Employee Personal Income Tax – R488 988 565 000 (75%)
- Government Employee/SASSA Personal Income Tax – R162 411 435 000 (25%)
VALUE-ADDED TAX (VAT)
- Total VAT Receipts 2024/2025 – R447 600 000 000 (100%)
- VAT Receipts on Private Consumption – R342 576 718 725 (77%)
- VAT Receipts on Government Employees – R81 011 281 275 (18%)
- VAT Receipts on SASSA beneficiaries – R24 012 000 000 (5%)
DO YOU THINK SASSA GRANT RECIPIENTS SHOULD BE EXEMPT FROM TAX?
Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1.
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