The average TTC (being total taxes borne plus total taxes collected) as a percentage of total turnover for participants in 2010 was 15.06%, down from 15.57% in 2009. The TTC as a percentage of turnover provides a measure of how much of companies’ turnover is used for purposes of paying their total tax bill.
 
The average Total Tax Rate (‘TTR’) for participants in the recent survey was 33.24% (2009: 32.53%). The TTR is a measure of all business taxes borne, against profit before all such taxes. This means that Tax Freedom Day (TFD) was celebrated on the 30th of April (2009: 2nd May). TFD indicates the notional day of the calendar year on which survey respondents had earned enough profit to fulfil their total tax expense (being corporate income tax as well as other business taxes borne).
 
The survey shows that R55.55 billion in taxes was borne by participants, making up 8.44% of the relevant total tax types received by government. Corporate income tax continues to be the highest tax borne by the survey participants at 72.29% of total taxes borne (and 28.70% of government’s total corporate income tax receipts). Put another way, for every R1 of corporate income tax borne, participants paid R0.38 in other business taxes.
 
Secondary Tax on Companies (STC) was the second largest of the total taxes borne by participants at 8.45%, followed by irrecoverable VAT at 6.83%. The remaining 12.44% is for all other taxes borne.
 
Large companies collect a significant amount of taxes on behalf of the State. The current survey participants collected a total of R87.21 billion in taxes on behalf of the South African Revenue Service (SARS), representing 20.80% of the relevant total tax types received by government.

PAYE
 
Of the significant taxes collected by these companies, Pay-as- you-earn (PAYE) was the largest at 32.53% of total taxes collected, followed by fuel-related taxes at 31.15%, excise duties at 19.32%, then value-added tax at 15.86%. Other taxes collected not mentioned above accounted for the remaining 1.13%.
 
The results of the survey show that these companies collected more in taxes compared to what they have borne. For every R1 of taxes borne by survey participants, they collected taxes of R1.63 (2009: R1.19) and for every R1 of corporate income tax borne, R2.25 was collected in taxes (2009: R1.60).
 
“The obligation imposed by government on businesses to collect taxes on its behalf is significant to the total tax revenue in the country” says De Wet, “and although these taxes are not a direct cost to the companies, they come with equal risks and compliance costs as taxes borne.”
 
Total taxes borne by survey respondents fell by 14.59% in 2010. Corporate income tax payments by survey participants showed the largest decrease in 2010, with an 18.10% decline from the previous year (Profit before tax decreased by 7.39% in 2010). The trend was further supported by the drop in STC of 6.56% which illustrates the decrease in the distribution of profits.
 
Total taxes collected increased by 15.19%. Personal income tax was government’s largest source of tax revenue in 2010 and a significant portion of this comes from the collection of PAYE. The survey participants were amongst the large employers in 2010, employing a total annual equivalent of 638,300 staff. In 2010, employment taxes collected increased by 14.16% compared to an increase of 14.72% in 2009.
 
Companies operating in South Africa during the fiscal year ended 31 March 2010 were subject to a total of 22 business-related taxes, compared to 20 in the previous year. On average, the number of taxes borne by a company in the survey was 7, and collected was 3.
 
According to the PwC TTC survey, the mining industry endured the highest tax burden in 2010. It had the highest TTR of 38.26% (survey average 33.24%) and the latest Tax Freedom day on 18 May (survey average 30 April).
 
The manufacturing industry participants (which include oil and gas) were the largest total tax contributors, with a R63.07 billion TTC in 2010 (44.81% of the R140.76 billion TTC of all survey respondents).
 
The results of the survey show that the allocation of companies’ resources to the different tax categories is closely linked to the Total Tax Contribution for those tax categories. Survey respondents indicate that on average 42.20% of companies’ tax resources are applied to corporate income tax, 18.06% to payroll related taxes, 17.06% to VAT, 11.17% to international tax activities and 11.51% to all other tax types. 
 
Comparing South Africa with other PwC country-specific TTC surveys, Japan has a Total Tax Rate of 58.3% (SA: 33.2%), and Tax Freedom Day in this country is 30 July (SA: 30 April). Belgium has 92 types of taxes in total (SA: 22), and a company in this country would, on average, bear 12 taxes (SA: 7) and collect 5 (SA: 3). TTC as a percentage of turnover is 20.7% on average in the UK (SA: 15.06%).
 
Paul de Chalain, Managing Partner, PwC Tax Service, concludes that once again the PwC TTC Survey illustrates the importance of large companies to the economic health of the country. “Studies such as the TTC should stimulate meaningful debate on South Africa’s tax system, whether that debate is to encourage efficiency or to influence the direction of fiscal policy.”
 
The TTC framework was designed by PwC and is used by all PwC offices globally.  The overall aim of the TTC framework is to improve transparency in relation to the reporting of all business taxes and to provide better, more consistent information for the management of tax, through analysis and benchmarking.  In particular, it was recognised that financial reports rarely include information on business taxes, other than corporate income tax.  The TTC Framework takes account of corporate income tax, as well as all the other business taxes borne by a company, and also those collected by companies on behalf of the fiscus.