South Africa’s corporate tax system is resting on the shoulders of a remarkably small group of companies, with just 0.1 per cent of firms contributing more than two-thirds of all corporate income tax collected in the country.
New data released in the South African Revenue Service’s (SARS) 2025 Tax Statistics reveals that only 1,195 companies each paying tax on more than R100 million in taxable income account for over R200 billion in annual corporate income tax. This makes corporate tax the most concentrated source of government revenue in the country.
The figures highlight a structural vulnerability in the country’s tax base, as revenue depends heavily on the performance of a limited number of large corporations. Analysts warn that such reliance leaves public finances exposed to sector-specific downturns and global economic shocks.
Corporate income tax remains South Africa’s third-largest revenue source, behind personal income tax and value-added tax (VAT). However, its share of total revenue has been on a long-term decline. In the 2024/25 financial year, corporate tax contributed 17.4 per cent of government revenue — a modest rebound from the previous two years but still far below the 26.7 per cent recorded in 2008/09.
According to SARS, the downward trend dates back to the aftermath of the Global Financial Crisis and has been compounded by domestic challenges, including prolonged load-shedding and sluggish economic growth, which have constrained business profitability.
While a significant reduction in load-shedding since 2024 has supported a gradual recovery in company earnings — alongside improved consumer spending — overall tax growth remains subdued. Corporate tax collections rose by only R6.4 billion year-on-year in 2024/25, despite intensified compliance and collection efforts by the revenue authority.
Sectoral data shows a marked shift in the composition of corporate taxpayers. The financial intermediation, insurance, real estate, and business services sector contributed more than 37 per cent of all corporate income tax in 2024/25, making it the largest contributor. This underscores the economy’s transition away from traditional sectors such as mining, whose tax contribution has declined over the past two decades despite periodic commodity booms.
Within financial services, tax contributions are further concentrated among a small cluster of large firms, particularly in the long-term and short-term insurance industries.
SARS statistics also paint a sobering picture of the broader corporate landscape. The number of companies registered for tax fell by more than 500,000 in the latest financial year, reflecting ongoing economic strain.
More strikingly, only 21.7 per cent of registered companies reported a positive taxable income. About 54 per cent declared no taxable income, while 24.3 per cent reported losses. This means fewer than a quarter of registered firms are actually paying corporate income tax, reinforcing the narrowness of the tax base.
Among companies that did report profits, the burden is heavily skewed. Just 630 large firms — representing 0.2 per cent of profitable companies — were responsible for 59.6 per cent of all corporate tax assessed. These firms typically report taxable incomes exceeding R200 million and are considered central to the country’s economic output.
The data underscores the challenge facing policymakers: broadening the tax base in an economy where profitability is uneven and growth remains fragile. With limited room to raise corporate tax rates without risking capital flight or reduced investment, strengthening economic performance and supporting business expansion may prove more critical than fiscal adjustments alone.
SARS officials say the statistics are intended to guide fiscal planning and highlight the need for a more resilient and diversified revenue base in the years ahead.
