South Africa’s big four banks paid R18.6 billion in direct tax in the first half of the current financial year, with Standard Bank paying the largest portion of R6.3 billion, followed closely by FirstRand with R5.8 billion.

This was revealed in PwC’s Major Banks Analysis report for the period ended 30 June 2023 after South Africa’s four largest banks had reported their interim results in September.

The combined headline earnings of these four banks rose 16.8% in the first half of 2023 to R55.8 billion.

Their revenue benefitted from higher interest rates, balance sheet growth, and efficiencies from the digitalisation of their services, said PwC.

Market volatility also benefitted their trading revenues.

In spite of the amplified risk outlook, the major banks’ balance sheets remained resilient, with capital and liquidity continuing to be maintained well above regulatory requirements, while balance sheet provisions reached unprecedented levels in anticipation of forecast risks.

The outlook for the rest of the year is expected to remain challenging as economic conditions are forecast to weigh on consumer, business and corporate confidence.

In South Africa, electricity supply constraints are expected to remain a clear and present risk to the local economy.

These banks also noted in their results that the higher interest rate environment is placing significant pressure on consumers and consumer-facing industries.

How much tax the ‘Big Four’ pay

South Africa’s ‘Big Four’ banks paid a combined R18.64 billion in direct tax in the most recent financial year.

Standard Bank was the largest taxpayer, paying R6.31 billion in direct tax. FirstRand was the second-largest taxpayer, paying R5.78 billion. Absa paid R4.3 billion in direct tax, and Nedbank paid R2.25 billion.

The report shows that the four banks paid a significant amount in direct tax, which is an important source of revenue for the South African government. Direct taxes are taxes that are paid directly to the government, such as income tax and corporate tax.

The report also shows that the four banks are among the largest taxpayers in South Africa. This is because they are large and profitable businesses. The banks generate a significant amount of income, and they pay a significant amount of tax on that income.

The payment of direct tax by the four banks is a positive development for the South African economy. It shows that the banks are contributing to the government’s revenue base, which is used to fund essential public services such as education, healthcare, and infrastructure.