Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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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 03-Dec-14
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Comments
Elektra said:
on Thursday 11-Dec-14 03:13 PM
This is great news, at least my Investment will grow a little faster now. Interest free tax, its about time.
Thabitha said:
on Tuesday 09-Dec-14 07:56 AM
Sounds good it will help lot of people to save
Sarah said:
on Friday 05-Dec-14 09:09 AM
Great idea. I am not sure if it will work here in South Africa tho.
Alexis said:
on Thursday 04-Dec-14 04:19 PM
sounds like a good idea, but yes South Africans are not great at saving, so if it works kudos
Jade said:
on Wednesday 03-Dec-14 03:34 PM
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.
Kaylee said:
on Wednesday 03-Dec-14 01:33 PM
I think it is a great idea, the tax man just kills all my money as soon as you feel you are earning a decent salary the tax man comes and takes most of it, so this idea is great!
Nikita said:
on Wednesday 03-Dec-14 08:40 AM
This is a great idea! You get taxed on everything in this country and for what??? To pay for Nkandla? I wouldn't mind getting taxed if I could actually reap the benefits.
Lourien said:
on Wednesday 03-Dec-14 08:09 AM
This is a very good idea and I am sure a lot of people will be making use of the Tax Free savings account. This is something everyone needs and will allow people to actually start saving.
david said:
on Wednesday 03-Dec-14 06:39 AM
my savings account is my bond. every single month, every spare cent i get, i pay in. it's my favourite banking transaction, and strangely, i sit in front of the computer screen for a while, and enjoy the feeling as i do the transfer from cheque to bond account.
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!
