Business
Gamagara: The Tiny Municipality with South Africa’s Highest Taxable Income
Gamagara, a small municipality in the Northern Cape, has once again cemented its place as South Africa’s wealthiest region in terms of average taxable income. According to the National Treasury and SARS 2023/24 Tax Statistics, the average taxable income in Gamagara stands at an impressive R518,808—the highest in the country.
Why Gamagara Stands Out
Gamagara’s exceptional economic performance is closely tied to the mining activities in Kathu, particularly the Sishen mine, owned by Kumba Iron Ore. This flagship operation has attracted high-skilled workers and high-income earners, fueling the municipality’s prosperity.
Top Municipalities by Average Taxable Income
Here are the top ten municipalities in South Africa based on average taxable income:
| Municipality | Average Taxable Income (R) |
|---|---|
| Gamagara, Northern Cape | 518,808 |
| City of Johannesburg, Gauteng | 484,671 |
| Stellenbosch, Western Cape | 458,198 |
| Joe Morolong, Northern Cape | 427,977 |
| City of Tshwane, Gauteng | 413,632 |
| Tsantsabane, Northern Cape | 405,926 |
| Ba-Phalaborwa, Limpopo | 404,434 |
| Thaba Chweu, Mpumalanga | 391,015 |
| Thabazimbi, Limpopo | 383,329 |
| Ba-Phalaborwa, Limpopo | 374,071 |
Gamagara’s Unique Spending Habits
In addition to topping income rankings, Gamagara also leads in municipal spending. Stats SA reports that the municipality spent an astonishing R23,201 per resident in 2022, far above the national average. This high expenditure is partly due to:
- Inventory losses/write-downs, which make up a significant part of its budget.
- The presence of skilled workers in Kathu, who contribute to a robust local economy.
A Model of Self-Reliance
Stats SA highlighted Gamagara’s financial independence, with 90% of its revenue self-generated through property taxes, service charges, and fines. This is well above the national average of 73%, showcasing its economic resilience.
Broader Economic Context
While Gamagara thrives, the report also shed light on challenges faced by South Africa’s broader economy.
- Company Income Tax (CIT) revenue dropped significantly, particularly in the mining sector, due to lower commodity prices and logistical challenges.
- Value-Added Tax (VAT) revenue remained subdued as high interest rates squeezed household spending.
Despite these setbacks, Personal Income Tax (PIT) revenue grew, driven by a recovery in employment and earnings.
Gamagara stands out as an economic powerhouse in South Africa, demonstrating how local resources, skilled labor, and effective municipal management can foster financial self-sufficiency. With its booming mining sector and robust economic framework, Gamagara continues to set a benchmark for success among South Africa’s municipalities.
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