/ 12 March 2015

SA’s richest people live … where?

It's not surprising that taxpayers in Johannesburg
It's not surprising that taxpayers in Johannesburg


The taxpayers in the tiny Northern Cape municipality of Gamagara, home of the Sishen iron ore mine and camel thorn trees, and eMalahleni, in the heart of the Mpumalanga coal mining area, earn among the highest average incomes in the country – more than people living in much bigger municipalities such as Cape Town and Durban.

Those in Gamagara and eMalahleni earned an average taxable income of between R250 000 and R320 000 a year, according to data released by the treasury and the South African Revenue Service for the 2013 tax year, the latest figures available.

Six municipalities made it into that average taxable income bracket and the big surprise was that Cape Town wasn’t one of them. Its taxpayers averaged R242 000 a year, but they were still beaten into ninth place by two other mining municipalities, Steve Tshwete (formerly Middelburg) in Mpumalanga and Mogale City in Krugersdorp.

Cape Town has a reputation as being the playground of South Africa’s super-wealthy, particularly those with homes along the Atlantic seaboard, and is famous for its Clifton beaches. And there certainly is a large concentration of people from the wealthiest income bracket living there.

Looking at a different data set, the 2011 Statistics South Africa (Stats SA) census, Cape Town is ranked third in the country for the number of households with an income of R2.5-million a year or more. But, according to the 2013 tax statistics, it would appear that the average Capetonian worker doesn’t earn as much as those in neighbouring Stellenbosch.

The top six municipalities in terms of average taxable income are: the City of Johannesburg, Gamagara, Stellenbosch, the City of Tshwane, Midvaal and eMalahleni.

What is it, then, that distinguishes these municipalities from all the others in terms of average taxable income?

City of Johannesburg metro
Average taxable income in 2013: R318 533
Number of taxpayers: 661 853
Taxable income: R210 822 000 000
It’s not surprising that the taxpayers in Johannesburg, the country’s economic heartland and the most densely populated metropole with 4.4-million people, earn the highest average income. It rose by 16% from 2012, even with 7% fewer taxpayers.

Most of South Africa’s wealthy people live here. There were 10 890 households in the top income bracket of R2.5-million a year or more, according to the 2011 census. That’s 23% of the country’s wealthiest households.

They are concentrated in the city’s northern suburbs: in the areas around Sandton, Bryanston, Rivonia, Hyde Park, Sandhurst, Craighall Park, Saxonwold, Rosebank, Park­town North and Dainfern in the far north. But they make up less than 1% of the total households in the metro.

At the opposite extreme, more than 200 000 households, 17% of the metro’s 1.4-million households, reported no annual income.

The average annual household income for the municipality is R29 400, according to Stats SA.

Gamagara local municipality (Sishen)
Average taxable income in 2013: R295 431
Number of taxpayers: 4 841
Taxable income: R1 430 000 000
Despite its small size (population: 42 000), this municipality about 200km northeast of Upington had the second-highest average taxable income of all municipalities in 2013.

In 2012 it was first, with an average taxable income of slightly more than R400 000, far above Johan­nesburg’s R274 000. But this was because, at the end of 2011, the local mine had paid out hundreds of thousands of rands to its workers as part of an empowerment deal.

In 2013 Gamagara’s average taxable income dropped by nearly 30% to just under R300 000, the largest drop of all the municipalities year on year.

Kathu, the municipality’s administrative centre, is home to about a third of the municipality’s population and 85% of the top income earners – those who earn R1.2-million or more a year – live there, according to Stats SA.

Twenty-eight households earn R2.5-million or more a year. That’s 4% of the Northern Cape’s most wealthy households. Most of the townsfolk speak Afrikaans, about 60% of the residents over the age of 20 have at least a matric qualification and 50% voted for the Democratic Alliance in last year’s election.

In the 2011 census the annual household income of the ward in which Kathu is situated was R230 700, nearly eight times higher than the national average.

But the difference between Kathu and the other four wards in the municipality is marked. The annual household income of the province in general is R57 300, and 23% of the population lives in informal dwellings or shacks. In Kathu, only 1.6% of residents live in shacks.

Another of Gamagara’s distinguishing features is that it had the highest annual growth rate of all the municipalities between 2001 and 2011, at 5.8%.

Stellenbosch local municipality
Average taxable income in 2013: R291 799
Number of taxpayers: 19 314
Taxable income: R5 636 000 000
Stellenbosch and Franschhoek fall under this municipality. Its vineyards and Cape Dutch architecture must be paying off because, interestingly, its taxpayers earn a higher average income than neighbouring Cape Town – R291 799 compared with R241 704.

But when it comes down to a count of the wealthiest households, Cape Town still beats the Boland municipality. There are 5 066 households in the highest income bracket in Cape Town, and only 305 in Stellenbosch.

But, like the rest of the country, the beautiful scenery cannot hide the contrast between rich and poor. About 23% of the people in Stellen­bosch live in shacks, substantially higher than the average in the West­ern Cape, and 20% reported no income in the 2011 census. The average annual household income was R29 400.

City of Tshwane (Pretoria)
Average taxable income in 2013: R271 853
Number of taxpayers: 472 361
Taxable income: R128 413 000 000
Tshwane is the third-largest municipality, with 2.9-million people. It’s the home of many government departments and it has the second-highest number of embassies in the world after the United States capital, Washington, according to the Local Government Handbook. It’s no doubt thanks to all those government jobs that the metro has 5 891 households in the wealthiest income bracket – the second-highest number after Johannesburg.

Waterkloof seems to be the suburb of choice for the rich.

At the opposite end of the income scale, nearly 136 000 households reported no income in the last census – that’s 15% of the total. The average annual household income is R57 300, significantly higher than that of the City of Johannesburg.

Midvaal local municipality
Average taxable income in 2013: R267 874
Number of taxpayers: 14 159
Taxable income: R3 793 000 000
Midvaal is one of the least densely populated Gauteng municipalities with about 100 000 residents, according to the 2011 census. It is also, somewhat surprisingly, one of the fastest-growing municipalities: 4% between 2001 and 2011.

It neighbours on the industrial centre of Vereeniging and extends to the Vaal Dam. It’s the only municipality in the province run by the DA.

There are a mere 135 households in the top R2.5-million-plus a year income bracket. Most of them are in Henley-on-Klip and the suburbs that adjoin Vereeniging’s Three Rivers neighbourhood.

Similar to the other Gauteng municipalities on the list, about 15% of households reported no income in the 2011 census. The average annual household income is R29 400, on a par with the national average.

EMalahleni local municipality (Witbank)
Average taxable income in 2013: R257 507
Number of taxpayers: 52 484
Taxable income: R13 515 000 000
The eMalahleni municipality is another surprise on the list. It lies in the middle of a coal-mining and power-generating area, described by Stats SA as an “energy mecca”.

Its annual average household income in the 2011 census was R57 300, about double the national average. Of its population of around 400 000, about 14% are registered as taxpayers and are clearly relatively well paid. Its economy was the eighth-fastest growing in the country, at 3.6%, between 2001 and 2011.

Nearly 1% of the households earn more than R1-million a year and 359 of them are in the top income bracket of R2.5-million or more. Most of them live in eMalahleni itself.

Its unemployment rate is about 27% and, at nearly 20%, the proportion of households that are shacks is nearly 1.5 times higher than the national average.