Taxpaying SAns finally settle their 2024 tax bill on 20 May – Tax Freedom Day
Today, 20 May 2024, is Tax Freedom Day. This is the day when the average taxpayer has earned enough money to fulfil their annual tax obligation. After Tax Freedom Day, taxpayers work for themselves and their families, and not for the government. From 1 January until 20 May, all the income earned by tax-paying South Africans is needed to pay for one year of government spending.
The Free Market Foundation (FMF) has calculated and published South Africa’s Tax Freedom Day annually since 1997.
Tax Freedom Day is a measure of how much time taxpayers spend working to fund state projects. From tomorrow, the people of South Africa will be working for their own benefit, and not that of South Africa’s underworked, overpaid civil service.
“Based on recent tax and spending levels, South Africa’s Tax Freedom Day is predicted this year to land on 20 May, four days later than last year. At the end of 2024, with complete data for the year, the date could be revised a couple of days earlier or later. But over the past 30 years, the actual Tax Freedom Day has been trending ever later in the year – and making most people poorer”, says Dr Richard J Grant, FMF senior consultant and Professor of Finance and Economics at Cumberland University, Tennessee.
Tax Freedom Day is determined in this way and spread over the first months of the calendar year to give us an idea of how the burden of taxes affects the average taxpayer. It is accepted that some lose more and others less of their hard-earned income in taxes, but the average, measured in days of the year, confirms what people know intuitively: South Africans are paying too much tax with a very low return on investment.
Given the current state of affairs in South Africa, Tax Freedom Day is likely to trend later and later into the year as government spending, the deficit, and public debt continue to increase.
Elaborating on the concept, Grant explains that “if Tax Freedom Day were on 1 January, taxpayers would be paying no tax, and if it falls on 31 December, the government would be taking all of our incomes as tax and we would have nothing left. The later the day, the worse for the average taxpayer and for anyone who needs a job.”
Despite the ever-growing tax burden on hardworking South Africans, the government produces little to show for it. The shocking state of infrastructure, the public healthcare system, high rates of violent crime, and the collapse of Eskom are a few examples of this tragedy.
When government is not misallocating tax revenue, corrupt politicians and officials in South Africa often steal it outright, without ever being brought to justice.
If South Africans want to see economic growth, a reduction in taxes and a concomitant increase in the efficiency of spending must occur.
A large plurality of the budget is dedicated to paying the salaries of officials. This is a logical and appropriate area in which to begin with necessary layoffs and spending cuts.
A reduction in taxes would provide a greater incentive for South Africans to work, save, and invest, thereby having more room to become champions of growth and job creation. The result would be greater investment, more innovation, a stronger economy, more jobs, more opportunity, and a more contented populace.
The current rate of taxation and its inadequate return on investment are not sustainable.
On Tax Freedom Day, roughly 10 days before the 2024 general election, the FMF invites South Africans to take a hard look at whether the ‘tax and spend’ approach government has adopted over the preceding three decades has benefited anyone except the political elite.
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The list below shows that TFD 2021 is four days later than in 2023.
Year – Tax Freedom Day
Tax Freedom Day
1995 – 23 April
1996 – 20 April
1997 – 26 April
1998 – 28 April
1999 – 4 May
2000 – 29 April
2001 – 29 April
2002 – 18 April
2003 – 25 April
2004 – 25 April
2005 – 29 April
2006 – 28 April
2007 – 25 April
2008 – 25 April
2009 – 3 May
2010 – 4 May
2011 – 5 May
2012 – 11 May
2013 – 9 May
2014 – 12 May
2015 – 19 May
2016 – 10 May
2017 – 9 May
2018 – 11 May
2019 – 10 May
2020 – 25 May
2021 – 19 May
2022 – 17 May
2023 – 16 May
2024 – 20 May
steven
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