Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
Divorce, Maintenance, Personal Injury, Medical Negligence
A lot of experts have been calling for tax-free savings accounts for some time. This is a country where people have a very poor record of saving money and to turn that around, we certainly need to give people some incentives. At the moment, for those of you who don’t know, if you have money in an account and you earn interest on it, you end up paying tax on that interest at whatever your tax rate is!
In other words, with interest rates as low as they are, you still end up with less because the interest that you earn still gets taxed as well. The government has obviously realised that this is not a good idea and so they are now introducing, from 1 March 2015, tax-free savings accounts. You will be allowed to contribute R30 000,00 a year to a tax-free saving account, without any tax being levied and a lifetime contribution limit of R500 000,00 will apply. One assumes that with time and inflation in years to come they will increase that. It is not anything to get particularly excited about, but it is a start and hopefully when they introduce compulsory retirement contributions, that will go a long way to solving some of the problems that people have in terms of not saving at all, and not providing for their retirement.
Posted by Michael de Broglio on Wednesday 26-Nov-14
Post a Comment
Comments
Catherine said:
on Friday 28-Nov-14 09:12 AM
This is a very good incentive to encourage people to save. Though I must say there is a whole lot of the population who don't even have an account to begin with.
Safia said:
on Thursday 27-Nov-14 03:30 PM
what about investment accounts? banks always phone and this investment account is better blah blah?
savings make a person sleep well at night. it is frighting to have no a cent saved because anything can happen any moment .
Jolene said:
on Thursday 27-Nov-14 03:20 PM
Very good news, saving for a rainy day!
Elektra said:
on Thursday 27-Nov-14 03:05 PM
I have given myself until 25 to use my money as I please, As soon that age is upon me, my savings plan will kick in. Interest free savings sounds good to me. But its never that clean cut.
Lucretia said:
on Thursday 27-Nov-14 01:37 PM
Finally!!! I have always said government must offer its people an incentive to save. It is annoying knowing that one saves and saves and then one is taxed on same - these taxes probably go to look after people who don't save. Let us hope the government makes saving so appealing that one would be a "steve" not to do it.
Sorea said:
on Thursday 27-Nov-14 01:17 PM
That is a nice incentive for people to start saving. I suppose this is targeted at beginner savers and the lifetime exclusion of R500 000.00 will be more money than most people will be able to save in any case. Good thinking.
Jessica said:
on Thursday 27-Nov-14 12:27 PM
Well that is awesome news but for how long will it last?
Lizanne said:
on Thursday 27-Nov-14 12:17 PM
As you say, its a start. hopefully more people will start saving as it is very important, but they will get a way for us to pay that tax back somehow.
Clare said:
on Thursday 27-Nov-14 12:14 PM
Savings accounts are fun i have a Wedding Savings account and I'm doing well i even opened one for my son this system us go be good.
Brumilde said:
on Thursday 27-Nov-14 12:12 PM
Apparently I heard new tax incentives will be brought in later as well, increase on salary tax and fresh produce. So either way tax will be paid.
Lourien said:
on Wednesday 26-Nov-14 04:48 PM
I hope this will help more people to saving although, they have it capped on R500 000.00. The government needs to reduce some other taxes, but then the country would probably fall apart and the government will not have enough money to do the basic without half of it disappearing or building luxury homes...
Alexis said:
on Wednesday 26-Nov-14 01:39 PM
I agree with Jade, it is incredibly important and as you said, it is not anything to get excited about, but at least it is a start, give the peole that push
Jade said:
on Wednesday 26-Nov-14 08:24 AM
Saving is incredibly important. You never know when your car is going to break down, when you are going to fall ill, or some disaster is going to happen, but I know that many friends and family that use their entire salaries on just living in the now. I'm also sure that in South Africa, many people just barely survive. Any incentive to save, is a good thing.
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
