South Africa’s biggest corporations pay a hefty sum in corporate tax, with individual tax contributions amounting to the billions – with Standard Bank sporting the highest direct tax contributions of the groups analysed.
Corporate income tax (CIT) in South Africa has a small tax base, with an estimated 0.09% of companies – 770 large corporates – paying over 60% of the country’s CIT.
BusinessTech looked at the amount of taxes declared by just some of South Africa’s biggest companies, represented in their most recent annual reports as well as PwC analysis.
These include:
- Naspers;
- Shoprite;
- Standard Bank;
- FirstRand;
- Nedbank;
- Absa;
- Capitec;
- Vodacom;
- and MTN.
The first point of reference for the analysis is direct tax, such as income, corporate and property tax, as these are imposed directly on the company in proportion to their income or assets. These taxes cannot be shifted to others and are borne solely by the taxpayer.
If they are reported, indirect taxes will also be looked at. These include the likes of VAT and customs duties, are levied on goods and services based on their value.
However, these will be additional references as these taxes are collected on behalf of the South African Revenue Service (SARS) authority from customers, suppliers or employees, and not the company itself.
Naspers
Naspers, the largest South African company by market cap headquartered in Cape Town, operates across 31 countries, ultimately diversifying its tax payments.
In the fiscal year ending March 2024, Naspers paid $118.7 million (R2.14 billion) in taxes in South Africa, slightly down from $121.1 million the previous year.
The decrease was attributed to losses in its online retail division amid a challenging economic environment marked by high interest rates and inflation.
Globally, Naspers paid $1.31 billion (R23.69 billion) in taxes, with Brazil receiving the highest amount of $241.8 million (R4.37 billion).
Shoprite
Shoprite, a major player in African retail known for competitive pricing and a wide product range, reported significant tax payments for the 2023 financial year.
The company paid a total of R2.8 billion in direct income tax, marking an increase of nearly R300 million from the previous year. Of this amount, R2.46 billion came from South African income tax.
Shoprite’s expansion has been notable, growing from 1,581 stores in 2014 to 3,543 stores in 2023, employing over 153,000 people.
The ‘Big Four’ banks
According to PwC’s Major Banks Analysis, South Africa’s ‘Big Four’ banks – Absa, FirstRand, Nedbank, and Standard Bank – paid the South African government R37.7 billion in direct taxes in 2023.
The financial services firm said the country’s major banks registered strong growth in a difficult operating environment, with revenue benefitting from higher interest rates, balance sheet growth, and efficiencies from digitalising their services.
The combined headline earnings of these four banks rose 13.8% in 2023 to R113.2 billion, despite their average credit loss ratio rising to 102 bps from 82 bps in 2022.
FirstRand Limited
FirstRand Limited has a portfolio of retail, commercial, corporate and investment banking services in South Africa offers niche products in certain international markets. The bank has three major divisions which are separately branded: First National Bank (FNB), WesBank and Rand Merchant Bank (RMB).
According to the Major Banks Analysis report for the period ended 31 December 2023, the group paid an estimated R12.59 billion in direct taxes.
According to its annual report, R810 million was also paid in indirect taxes during the fiscal year ending June 2023.
Standard Bank
PwC’s Major Banks Analysis shows that during the 2023 fiscal year, Standard Bank Group paid R12.72 billion in direct taxes during the 2023 financial year.
Additionally, according to its 2023 integrated annual report, the group saw an increase in indirect taxes, totaling R1.85 billion compared to R1.6 billion previously.
Absa
The Absa group, one of the largest financial services groups in Africa, headquartered in Johannesburg, paid an estimated R7.98 billion in direct taxes during the 2023 financial year, according to PwC’s Major Banks Analysis.
Nedbank
Nedbank Group Limited, commonly referred to as Nedbank, is one of South Africa’s largest banking groups. According to PwC’s Major Banks Analysis, it is estimated that the bank paid R4.43 billion in direct taxes in 2023.
Capitec Group
Capitec Group reported a notable increase in tax payments for the 2024 financial year, totaling R2.88 billion in income tax, according to its most recent annual report..
This marked an uptick of nearly R400 million from the previous year, driven by a 10% rise in active clients. The company’s growth strategy and expanding client base have bolstered its fiscal contributions.
Vodacom
Vodacom, a major telecommunications provider operating across Africa, reported total contributions of R13.7 billion to public finances in South Africa in the most recent financial year.
This included R4.4 billion from direct taxes, R6.5 billion from indirect taxes, and R2.8 billion from direct non-tax contributions.
MTN
MTN Group, a prominent telecom operator across numerous African and Middle Eastern countries, reported total income tax payments of R7.5 billion for the 2023 fiscal year.
It is unclear what the exact contributions into South Africa is, as these taxes are grouped in the report.
The company’s operations in Nigeria and South Africa contributed the most to its overall tax contributions.
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