This was a pragmatic approach to a current fiscal problem and I think the Minister dealt with it in a methodical way, not through Knee jerk tax increases, but rather relying on inflation to increase the tax income, with the rebate sweetener.
The literal translation of the French phrase is The more things change; the more things stay the same and this can be said for the often-forgotten tax saving benefits that are available to all of us mere tax paying mortals.
Like contributions towards Retirement benefits.
To put it simply, we can contribute up to 27.5% of our taxable earnings to retirement benefits that include Pension, Provident and Retirement Annuity.
This incorporates a tax-deductible ceiling of R350 000.
For every Rand that we contribute towards one of these retirement instruments, we enjoy a tax-deductible benefit based on the rate of tax we are paying.
Given that so many of us will not have enough money on which to retire comfortably, this option has a major attraction in that it incorporates a twofold benefit.
- Tax deduction advantages on the contributions.
- An increased retirement income once you reach the magic age of retirement.
In addition to this, a Retirement Annuity allows you to contribute additional lump sums as and when you have the money to do so and which will add to the tax-deductible benefits.
Many of us make a lump sum payment into our retirement annuities just prior to the tax year end, which helps to mitigate and additional tax we may have to pay.
Why not contact your Financial Planner now and ask them to give you some information?
It would be the pragmatic thing to do.