Money and Markets

South Africa added 60,000 more millionaires and 500,000 taxpayers last year, data shows

Business Insider SA
A woman's hands hold a thick bundle of South African R200 banknotes as she riffles through them. (Image: Getty)
A woman's hands hold a thick bundle of South African R200 banknotes as she riffles through them. (Image: Getty)
  • Last year, South Africa created 60,000 more millionaires, challenging the view that the country’s middle class and wealthy are declining.
  • Almost 500,000 new taxpayers were added last year, despite the government raising the tax limit to R90,000 from R80,000.
  • According to BrandMapp, that conducted the study, the rich have become richer and the poor poorer.
  • The study found that 60% of South African consumers had a good handle on their debt or were living debt-free.
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Last year South Africa saw an increase in the number of people earning a million rand and more annually, despite widespread concern about the country’s dwindling middle class.

According to data from the Treasury department, personal tax income grew to R72 billion in 2021, with 60,000 new South African millionaires created.

In its new study, BrandMapp, which runs an independent annual survey of the country’s taxpayer base, found that the state of the middle class and wealthy income earners was not that of a diminishing one.

“Despite all the pandemic hardships, it is irrefutable that our millionaire class is on the rise,” said Brandon de Kock, Director of Storytelling for BrandMapp.

BrandMapp found that although 40% of taxpayers have felt debt-stressed over the past three years, 60% of the middle class are either living debt-free or have a good handle on their debt.

“What we are seeing is not a case of the entire country becoming poorer. Instead, it might be more true to say that the impact of Covid has been that some have become poorer, while others have become richer – a different dynamic,” De Kock said.

He said South Africa’s middle class may have instead posted one of the greatest comebacks over the past year.

One of the most significant tell-tale signs of the recovery of the middle class is the growth of the taxpayer base, he said, which saw 500,000 new taxpayers last year. The number of taxpayers grew to 7.4 million from a previous 6.9 million. This is despite the national treasury raising the tax limit to R90,000, from R80,000 previously, which would have shrunk the overall taxpayer base under different circumstances.

“That alone should account for a massive shrinkage of the total taxpayer base. But it hasn’t. As for the middle class and up, the group is at very worse static once adjusted for inflation, but hardly in decline,” he said.

“In fact, for taxpayers earning R150,000 + per annum, what we see is an incredible bounce-back in this bracket after the blows of 2020,” said De Kock.

Taxpayers taking home R350,000 and above have boomed and have grown by 18.5%. This group of taxpayers pays for 85% of all income tax collected.

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