South Africa has 8.3 million taxpayers who must support 26.5 million grant recipients

South Africa is in an unsustainable financial situation with a narrow tax base of 8.3 million income taxpayers supporting a social safety net for 26.5 million people.

This was revealed in the National Treasury’s 2026 Budget Review and in a Parliamentary question-and-answer session.

The 2026 Budget showed that, in the current financial year, South Africa has 8.338 million individuals and taxable income.

These are people who earn over R99,000 per year and who pay personal income tax. Simply put, they are the cornerstone of the country’s tax base.

What is particularly concerning is that around 1 million income taxpayers account for 62% of all personal income tax.

On the other side of the spectrum, South Africa has 26.5 million social grant beneficiaries funded through tax revenue.

Spending on social development will increase from R412.2 billion in 2025/26 to R466.4 billion in 2028/29.

This supports poverty reduction by providing social grants, risk benefits through social insurance, and welfare services.

Social grants constitute the largest share. Excluding the social relief of the distress grant, spending will increase from R246.6 billion in 2025/26 to R276.5 billion in 2028/29.

The social relief of distress grant is allocated an additional R36.4 billion to extend payments until 31 March 2027 at the current rate of R370 per beneficiary per month.

To put these numbers in perspective, there were around 2.5 million social grant recipients in South Africa in 1994.

That means that the number of grant recipients increased by 960% to 26.5 million over the last 32 years.

Instead of being concerned about the narrow tax base and large number of grant recipients, President Cyril Ramaphosa celebrated the situation.

“We have done a great deal in the provisioning of grants. No African country pays grants to so many people,” he said.

The table below shows the number of South Africans and their taxable income in the current financial year.

Annual income (R thousand)	Number	Tax (R billion)	Percentage
R99 – R150	2,082,136	14.5	1.7%
R150 – R250	1,490,061	21.2	2.5%
R250 – R350	1,182,539	43.6	5.2%
R350 – R500	1,378,140	96.6	11.4%
R500 – R750	1,136,023	149.1	17.7%
R750 – R1 000	423,786	97.9	11.6%
R1 000 – R1 500	377,415	139.3	16.5%
R1 500 +	267,761	282.6	33.4%
Total	8,337,861	844.8	100%

Concerns raised about grant recipients versus taxpayers

Member of Parliament, Thulani Gamede, recently asked Finance Minister Enoch Godongwana about the cost of maintaining the safety net.

He asked at what point the dedicated social wage stops serving as a bridge to opportunity and becomes a constraint on investment.

Significant investments are needed to improve the country’s education and infrastructure to alleviate poverty.

He also asked about market reforms that broaden the tax base and reduce the number of people who need assistance.

Godongwana responded, explaining that the government’s fiscal policy is balanced to support a sustainable fiscal system.

This is done while ensuring that the social wage and socio-economic rights are maintained and advanced within available resources.

“Government aims to expand economic reforms to protect vulnerable households while it works to raise growth, expand employment, and broaden the tax base,” he said.

He added that the 2026 Budget protected the social wage while shifting spending composition towards capital investment.

“South Africa’s fiscal system remains highly redistributive, with the social wage accounting for 60% of consolidated non-interest spending,” he said.

He added that the budget combines social protection with structural reforms, higher public infrastructure investment, and improved state.

“These measures are intended to raise growth, improve confidence, support job creation and expand the tax base,” he said.