Experts: Drop tax on SASSA grants and govt wages

PRETORIA — 2025

Economists are urging tax exemptions for SASSA grant beneficiaries and government employees, arguing current tax arrangements are wasteful and inefficient.

New SARS figures reveal South Africa collected R1.1 trillion in 2024/2025 taxes. R267 billion came from personal income tax and VAT on SASSA grants and state wages. (SARS data)

Experts claim taxing money the government distributed creates pointless cycles: “inefficient and wasteful”. Grants now reach about 45% of South Africans (unverified), making this the budget’s second-largest expense after debt payments. (Daily Investor)

SARS collected R1.1 trillion while paying out R762 billion to grant recipients and government employees. Critics say complexity and fraud risks make exemptions unfeasible.

Personal income tax breakdown for 2024/2025:

• Total collected: R651.4 billion
• Private workers’ share: R489.0 billion (75%)
• State/SASSA share: R162.4 billion (25%)

VAT breakdown:

• Total: R447.6 billion
• Private spending: R342.6 billion (77%)
• Government employees: R81.0 billion (18%)
• SASSA recipients: R24.0 billion (5%)

Government employees contribute approximately 23% of national VAT receipts alongside private citizens’ 77% share.