Cape Town – Today 25 May 2017 is Tax Freedom Day – the date on which South Africans will have earned enough to pay all the taxes levied by government. This is five days later than in 2015 and six weeks later than in 1994.
CALCULATOR: Where your time and money is spent in government
In a statement, the Free Market Foundation (FMF) said this trend is likely to continue as government spending, its deficit and government debt continue to rise.
“Tax Freedom Day is a measure of how much time you spend working for someone else’s benefit – in this case government gross domestic product (GDP) – rather than your own,” the FMF says.
“On Tax Freedom Day we, the people of South Africa, at last start to work for ourselves. It is the day on which we have finally paid our tax bill in full. From 1 January until 25 May, all the income earned by average South Africans make up the amount of money needed to pay for one year of government spending.”
Judged by international standards, the South African government spending is very high – among the worst 17% of countries in the world measured by the country’s level of development.
“Even worse, our government spending is growing at such an alarming pace that it is using our taxes more and more for consumption spending rather than for core functions and capital projects.”
The FMF says taxes shift resources from the private sector to the government. High taxation slows, not grows, an economy. Government is both less innovative and less efficient than the private sector.
“On Tax Freedom Day, we have the opportunity to think about the role of government in our lives and whether we are getting value for money, the right service delivery and effective programmes.”
FMF statistician Garth Zietsman has calculated that average income earners will work five more days in 2017 than in 2015 before reaching Tax Freedom Day.
“Given the estimated Central Government Revenues for 2017 as a percentage of GDP, Tax Freedom Day for 2017 occurs five days later than 2015. There has been a trend toward taking more of the GDP in taxes every year”.
South African citizens need to understand that the only way government can find the money to fund its spending is to increase taxes, the FMF says.
Tax Freedom Day in the last 23 years:
- 1994: 12 April
- 1995: 16 April
- 1996: 13 April
- 1997: 16 April
- 1998: 16 April
- 1999: 20 April
- 2000: 22 April
- 2001: 20 April
- 2002: 26 April
- 2003: 26 April
- 2004: 2 May
- 2005: 11 May
- 2006: 12 May
- 2007: 14 May
- 2008: 10 May
- 2009: 26 April
- 2010: 4 May
- 2011: 26 May
- 2012: 16 May
- 2013: 20 May
- 2014: 19 May
- 2015: 20 May
- 2016: 25 May
- 2017: 25 May (5 days more than 2015; 6 weeks more than 1994)