Why you pay tax and where it goes

POLOKWANE – Taxation represents a compulsory contribution to the government made by taxpayers, as governments do not engage in the sale of products or generate profits to fund essential services such as healthcare.

Taxes are levied on various aspects of economic activity, including earnings, purchases, and property ownership.

Income tax, a significant component of taxation, plays a vital role in enabling the government to address our nation’s social and economic needs.

A substantial portion of nationally raised revenues is allocated to the nine provinces and over 250 municipalities to facilitate the fulfilment of their mandated functions, encompassing essential services such as basic education, healthcare, transportation, human settlements, infrastructure, and social development programmes.

The government has a consolidated expenditure which includes:

Social services:
1. Learning and culture:
• Basic education.
• National Student Financial Aid Scheme (NSFAS).
• University transfers.
• Skills development levy institutions.
• Education administration.
• Technical and vocational education and training,
2. Health:
• District health services.
• Central hospital services.
• Other health services.
• Provincial hospital services.
• Facilities management and maintenance.
3. Community development:
• Municipal equitable share.
• Human settlements, water and electrification programmes.
• Public transport.
• Other human settlements and municipal infrastructure.
4. Social Development:
• Old-age grant.
• Social security funds.
• Child-support grant.
• Other grants.
• Provincial social development.
• Policy oversight and grant administration.

Economic development:
• Economic regulation and infrastructure.
• Innovation, science and technology.
• Industrialisation and exports.
• Job creation and labour affairs.
• Agriculture and rural development.

Peace and security:
• Police services.
• Defence and state security.
• Law courts and prisons.
• Home affairs.

General public services:
• Public administration and fiscal affairs.
• External affairs.
• Executive and legislative organs.

Debt-service costs.
Contingency reserve.

Sources:
• https://www.treasury.gov.za
• www.sars.gov.za