Company income tax (CIT) was the third largest source of government tax revenue in 2021\/22, according to the South African Revenue Service (SARS).1 <\/sup>Personal income tax was the largest contributor (35,5%), followed by value-added tax (25,0%), CIT (20,7%) and other levies and taxes (18,8%).<\/p>\n As SARS points out, although CIT has retained its position as the third largest source of tax revenue, its contribution has weakened over the years. In 2008\/09, CIT\u2019s contribution was 26,7%. This slowly declined to 15,9% in 2019\/20.<\/p>\n After the pandemic, however, CIT surprised on the upside. Its contribution increased to 20,7% in 2021\/22. CIT also rose in absolute terms, from a pre-pandemic R214\u00a0billion in 2018\/19 to R323\u00a0billion in 2021\/22. According to SARS, this was mainly due to stronger growth in the mining (supported by commodity price increases), manufacturing and financial sectors.<\/p>\n 2020 and 2021<\/strong><\/p>\n The rise in CIT in 2021\/22 corresponds with data from Stats SA. The Quarterly financial statistics (QFS)<\/em> survey collects financial data from enterprises in the formal business sector.2<\/sup> It shows that the business services, manufacturing, mining and trade industries are the largest contributors to company tax.<\/p>\n Plotting these contributions over time shows the impact that mining had on tax collection in 2020 and 2021 (Figure\u00a01). Mining accounted for 25% of total company tax in Q1:\u00a02020, just before the pandemic. Its contribution increased to a high of 50% in Q2:\u00a02021.<\/p>\n The industry recorded the largest increase in taxes paid, from R8\u00a0billion in Q1:\u00a02020 to R31\u00a0billion in Q2:\u00a02021 (up 277%). Stronger mineral sales were recorded too \u2013 according to data from Stats SA\u2019s Mining: Production and sales<\/em> statistical release \u2013 with sales of platinum group metals driving much of the upward momentum.3<\/sup><\/p>\n Most of the industries covered in the QFS survey registered a rise in company tax over this period. Mining was followed by construction (up 60%), manufacturing (up 59%), and business services (up 28%). Electricity, gas & water, transport, storage & communication and trade also recorded increases. As a result, total company tax \u2013 as reported by the QFS survey \u2013 increased from R32\u00a0billion in Q1:\u00a02020 to R62\u00a0billion in Q2:\u00a02021. Mining was the largest positive contributor.<\/p>\n The personal services industry was the lone exception, recording a decline of 12%.<\/p>\n 2021 to present<\/strong><\/p>\n After its peak in Q2:\u00a02021, CIT from the mining industry lost ground, shrinking from R31\u00a0billion to R12\u00a0billion in Q2:\u00a02023. The industry\u2019s contribution weakened too, from 50% to 23%.<\/p>\n Overall company tax continued to rise, from R62\u00a0billion in Q2:\u00a02021 to a high of R77\u00a0billion later that year. It then declined to R49\u00a0billion in Q2:\u00a02023. Despite the decline, total company tax is still above the R32\u00a0billion mark recorded in Q1:\u00a02020.<\/p>\n \u00a0<\/strong><\/p>\n Manufacturing\u2019s long-term decline<\/strong><\/p>\n Mining may have its moments when commodity cycles peak. Manufacturing, on the other hand, exhibits a different pattern in Figure\u00a01. The industry\u2019s contribution to total CIT has slowly eroded. After reaching a peak of 37% in Q1:\u00a02015, manufacturing\u2019s contribution weakened, reaching an average of 17% in 2021. In Q2:\u00a02023, its contribution was 20%.<\/p>\n For more information on company tax and other financial indicators, download the latest Quarterly financial statistics (QFS)<\/em> statistical release here<\/a>.<\/p>\n <\/p>\n 1 <\/sup>SARS, Tax Statistics, 2022<\/em> (download here<\/a>).<\/p>\n 2 <\/sup>In the QFS, the formal business sector includes private businesses and public corporations, but excludes agriculture, financial intermediation, insurance, government institutions and educational institutions.<\/p>\n 3 <\/sup>Stats SA, Mining: Production and sales, July 2023<\/em>. \u2018Mining Production and sales (202307)\u2019 Excel file (download here<\/a>).<\/p>\n Similar articles are available on the Stats SA website and can be accessed here<\/a>.<\/p>\n For a monthly overview of economic indicators and infographics, catch the latest edition of the Stats Biz newsletter here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Although the mining industry strengthened company tax collections after the COVID-19 pandemic, its momentum has recently waned. The importance of CIT Company income tax (CIT) was the third largest source of government tax revenue in 2021\/22, according to the South African Revenue Service (SARS).1 Personal income tax was the largest contributor (35,5%), followed by value-added read more »<\/a><\/p>\n![\"data1\"](\"https:\/\/www.statssa.gov.za\/wp-content\/uploads\/2023\/10\/data1.jpg\")
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