The South African tax regime is set by National Treasury but managed by the South African Revenue Service, which was established in terms of the South African Revenue Service Act 34 of 1997 as an independent agency, which is responsible for administering the tax system and customs services.
Income tax is levied on resident's worldwide income with appropriate relief to avoid double taxation. Non-residents are taxed on their income from a South African source.
The following are types of taxes levied by SARS:
This is a main source of government income. It is levied on all income and profit received by a taxpayer, which includes individuals, companies and trusts.
Value Added Tax (VAT)
Is an indirect tax levied at 14% except for exports and certain foodstuffs and services which are zero-rate. Certain services are exempted from VAT i.e. education services, public transport and rental accommodation.
Customs & Excise Taxes
Customs/import duties are imposed on some goods that are imported in South Africa in order to facilitate legal trade and to protect local producers from illegal trade practices.
This tax is levied as a specific duty on tobacco and liquor and also on cosmetics, televisions, audio equipment and motor cars.
Excise duty, fuel levy and environmental levy are forms of indirect taxation used by government to basically contribute to the fiscus, as well as to influence consumer behavior.
Payable on the acquisition of any property as defined in section 1 of the Transfer Duty Act 40 of 1949. It is levied on the value of the property acquired, or the value by which the property is enhanced by the renunciation of an interest in, or restriction upon the use or disposal of property.
Levies charged at the rate of 20% upon the taxable amount from the estate of every person who dies on or after 1 April 1955 in terms of the Estate Duty Act.
Security Transfer Tax
Payable on the transfer of any security issued by a close corporation or company incorporated in South Africa including foreign companies listed on the South African stock exchange.
Skills Development Levy
A compulsory levy scheme for funding education and training as per the Skills Development Act, No 97 of 1998. The purpose of the levy collected is to develop the skills of the South African workforce. Employers must pay 1% of their worker's pay as levy