Statistics Act, 1999
R 385
National Health Act, 2003 (Act No. 61 of 2003)NoticesNational Health Insurance Policy towards Universal Health CoverageChapter 7 : Financing of NHI7.5 Options for public funding of NHI7.5.1 Payroll taxes |
226. | Payroll taxes are sometimes used as mandatory membership contributions and can be significant revenue sources. Payroll-based social security taxes usually take the form of a fixed rate of tax on earnings, levied on employees or employers, or both. An earnings ceiling may be prescribed, at which the tax is capped in nominal terms, but this results in these taxes becoming regressive. |
227. | A payroll tax has potential as a further extension of the South African tax structure: the present payroll tax burden is low, it would be a buoyant and stable source of revenue and it would be administratively straightforward and health is one amongst several social benefits that could be financed in this way. It is administratively feasible as it will be based on an existing administrative framework and will require minimal changes to the existing tax administration system. However, it does not draw revenue from high income individuals who are not necessarily ‘employed’ (e.g. those whose income is from inherited wealth, investments, etc.) and may have a negative impact on formal sector employment creation, especially for entry-level jobs. |