This article sheds new light on the evolution of income inequality and government redistribution in post-apartheid South Africa. We combine survey, tax, and historical budget data to construct a new microdatabase on the distribution of labor and capital incomes, taxes, cash transfers, and public services since 1993. Pretax income inequality has increased, but this rise has been overcompensated by major expansions in government redistribution. After accounting for taxes and transfers, low-income households have benefited from the greatest real income gains. However, South Africa still stands out as one of the most unequal countries in the world. In 2019, the top 1% received almost 20% of posttax income, more than the bottom 50% as a whole. Racial inequalities have declined, but this decline has been entirely driven by the boom of top Black income groups. We highlight the role of taxes and transfers as powerful levers of inclusive growth yet insufficient tools to curb South Africa’s extreme inequalities.