12 extra taxes you pay on everything you buy in South Africa

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There is a continued trend of African governments increasing their indirect tax base, adopting more policies to be imposed on more people and businesses, says financial services firm PwC.

An indirect tax is a tax levied on goods and services, collected by intermediaries, and ultimately paid by consumers through the purchase price.

The group’s latest VAT Indirect Taxes in Africa report for 2023 detailed that in South Africa, the value-added tax (VAT) imposed is a flat rate of 15%.

“VAT is levied on ‘taxable supplies,’ which are supplies of goods or services made by a ‘vendor’ (a person registered or required to be registered as a VAT vendor with SARS) in the course or furtherance of an enterprise carried on by the vendor wholly or partly in South Africa,” PwC said.

VAT is not the only tax paid on certain goods, however.

PwC provided a breakdown of a handful of other taxes imposed on certain goods and services:

Customs duty

Customs duties are paid on imported goods into South Africa at the time of entry for home consumption, said PwC.

According to the group, the rate ranges from 0% to 60% of the value of the goods.

“Depending on the origin of the imported goods concerned, preferential tariff treatment may be applied,” said PwC.

Excise duty

“Excise duty is payable on certain locally manufactured goods and non-essential products consumed locally with a corresponding customs duty (at the same rate of duty) on imported goods of the same class or kind,” said PwC.

Things that include an excise duty are, for example:

  • Fuel products
  • Tobacco products
  • Malt beer
  • Traditional African beer
  • Spirits (liquor) products
  • Wine,
  • Other fermented beverages
  • Ad valorem products
  • Environmental levy goods

Environmental levies

The financial services firm added that an environmental levy is charged on certain locally manufactured and imported plastic carrier goods and grocery bags, electricity generated at an electricity generation plant in South Africa, electrical filament lamps and carbon dioxide (CO2) vehicle emissions

Carbon tax

Under the Carbon Tax Act, companies and taxpayers are subject to a carbon tax rate of R159/per tonne of carbon dioxide equivalent for the 2023 tax period.

A person conducting an activity in South Africa resulting in GHG emissions equal to and/or above the prescribed thresholds, as provided for in Schedule 2 of the Carbon Tax Act, will be subject to a carbon tax,

Health promotion levy on sugary beverages (sugar tax)

Since April 2018, there has been a levy on sugary beverages in an effort to decrease diabetes, obesity and other related diseases and is known as Health Promotion Levy (HPL), commonly known as the ‘sugar tax’.

“The rate is 2.1 cents per gram of sugar content that exceeds 4.0 grams per 100 ml. The first 4.0 grams per 100 ml are exempt from the HPL,” said PwC.

The HPL considers sugar content to include both natural and added sugars. The levy is applied to both imported and locally produced goods

Transfer duty

PwC said that transfer duty is required when transferring immovable property, except when the property transfer is already subject to VAT.

The duty is imposed on the person who is acquiring the property.

The following rates have been applied since 1 March 2021:

  • if the value of the property is less than R1.1 million: 0%.
  • if the value of the property exceeds R1.1 million, but not more than R1.5 million: 3% on the value above R1.1 million.
  • if the value of the property exceeds R1.5 million but not more than R2.1 million: R12,375 + 6% of a a value above R1.5 million.
  • if the value of the property exceeds R2.1 million but not more than R2.7 million: R48,675 + 8% of the value above R2.1 million.
  • if the value of the property exceeds R2.7 million but not more than R12.1 million: R97,075 + 11% of the value above R2.7 million.
  • if the value of the property exceeds R12.1 million: R1.1 million + 13% of the value above R12.1 million.

Securities transfer tax 

Securities transfer tax is imposed on both listed and unlisted securities, levied at a rate of 0.25% on the taxable amount (typically the purchase price) for any security transfer unless a special rule applies, said PwC.

Skills development levy

Employers who have an annual payroll exceeding R500,000 are required to pay a skills development levy at a rate of 1% of the total remuneration paid to employees.

“This is a compulsory levy scheme for the funding of education and training,” said PwC.

Turnover tax

Individuals with a turnover under R1 million and not providing professional services can opt for turnover tax, a simplified system replacing VAT, Income Tax, Provisional Tax, Capital Gains Tax, and Dividends Tax for micro-businesses.

General fuel levy and Road accident fund levy

“The general fuel levy and the Road Accident Fund levy are payable on the sale of petrol and diesel. No VAT is payable on fuel levy goods,” said PwC.

Air passenger departure tax

The financial services firm added that passengers departing to Botswana, Lesotho, Namibia, and Eswatini pay an air passenger departure tax of R100 per passenger, while passengers departing to other international destinations pay R190 per passenger.