South African income tax is built on a progressive tax basis, meaning that the more taxpayers earn, the higher the marginal tax rate and the more tax is payable on assessment. A progressive tax system favours low-income earners by imposing lower income tax rates, and adversely affects higher income groups. Progressive tax is typically applied to personal income tax. In addition, South African income tax system is residence-based. South African tax residents are taxed on their worldwide income, and non-residents are taxed on their income from a South African source only.

Taxable income is calculated by taking into consideration all gross income, in cash or otherwise, received by or accrued to a resident taxpayer, after subtracting all allowable deductions, under the South African tax laws.

We shall discuss the technical expressions of gross income, income and taxable income in terms of the Income Tax Act of South Africa. While these words are extensively used in our daily lives, their technical meanings and definitions for taxation purposes, must be made well understood by all taxpayers.

We must be prepared to live with coronavirus for a year or even more' - Ramaphosa
Taxpayers must remain compliant, more than ever before, as our government needs tax revenue to provide much necessary relief to businesses and individuals, and especially to keep the community health workers, and other medical and frontline workers employed.
SARS announced 3-Phased approach for the upcoming tax filing season for personal taxpayers:

VAT Regulations prescribing electronic services were amended and with effect from 1 April 2019, the registration threshold for which a foreign electronic services supplier is required to register for VAT, was increased from R50 000 to R1 million.

As a result, a foreign electronic services supplier may wish to cancel its registration if its total value of taxable supplies will not exceed the threshold of R1 million, in any consecutive 12-month period.

Section 72 of the VAT Act allows the Commissioner to make an arrangement as to the manner in which the provisions of the Act shall apply. Therefore, Binding General Ruling (VAT) 51 constitutes such an arrangement, where “a foreign electronic services supplier that wishes to have its registration canceled in the circumstances where the total value of taxable supplies will not exceed R1 million in any consecutive period of 12 months, may make a written request to have the registration canceled”.

Are you a foreign electronic service supplier in South Africa, and do you want to cancel your VAT registration, because the ruling applies to you?

We apply to SARS on your behalf to cancel your VAT Registration.

Taxable income is calculated by taking into consideration all gross income, in cash or otherwise, received by or accrued to a resident taxpayer, after subtracting all allowable deductions, under the tax laws in the Republic.

An employer is liable under the provisions of the Fourth Schedule to the Income Tax Act to deduct employees’ tax (PAYE) on behalf of employees and must pay the amounts so deducted to SARS. Furthermore, the Act requires all registered employers to issue IRP5 certificates to their employees, for a relevant tax year, in which all income, allowable deductions, and tax paid are stated.

This is normally referred to as corporate income tax and it forms part of the gross national tax revenue. According to "Chapter 4: Revenue trends and tax policy" from the Budget for 2018/2019, the corporate income tax accounts for 15.51% of the estimated 2018/2019 consolidated budget.

Corporate income tax was also the subject of a report issued in March 2018 by the Davis Tax Committee on the efficiency of the corporate tax system in South Africa. 

SARS is mandated to assess and to collect corporate income tax from corporate taxpayers, who must complete the ITR14 income tax return, which is specifically designated for companies. The ITR14 must be completed and submitted to SARS within 12 months after the financial year-end of a corporate entity.