Where does provincial government get its funding from? South Africa’s nine provincial governments form the second tier of government, sandwiched between national government and local government. Among other functions, provincial governments play an important role in the administration of the country’s health and education systems.
Provincial government departments sourced R519,4 billion in revenue in 2016/17, according to Stats SA’s latest Financial statistics of provincial government report; a 6,3% rise from the R488,8 billion recorded in 2015/16.
Where did this money come from? Provinces receive the bulk of their revenue from national government in the form of financial grants. Not to be confused with social grants, financial grants are current or capital transfers from one government unit to another government unit or to an international organisation.
Provinces generated 2,3% (R12,1 billion) of total revenue themselves, via taxes. The motor vehicle licence fee you pay every year goes straight to the coffers of your provincial government, together with money sourced from taxes on specific services (such as gambling and betting) and excise taxes. Motor vehicle taxes (licence and registration fees) contributed R9,3 billion (or 77%) to the R12,1 billion, followed by taxes on specific services (22%) and excise taxes (1%).
It comes as no surprise that Gauteng, the most populous province, collects just over a third of all provincial taxes collected nationwide. KwaZulu-Natal comes in second place, followed by Western Cape.
For more information, download the latest Financial statistics of provincial government release here. “Other sources” of revenue include items such as sales of goods and services, property income and fines.
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