With just 12 days left of the Tax year and the budget speech next week, this is the time of year, that you should be evaluating your investments and retirement savings and maxing them out as much as you can. While many people know they should be saving more for a raining day and retirement, most of us are not. Utilising a few tax incentives can assist you a great deal now and years down the line. 

Three of the easiest methods to reduce your tax liability now and in the future are listed below. 

  1. Tax payers can deduct retirement fund contributions of up to 27.5% of their income, limited to a total contribution of R350,000 per year. You can make lumpsum contributions and many retirement annuities accept ad-hoc payments. 

A tax payer earning over R555,600 contributing an additional amount to their RA will immediately save R39,000 on every R100,000 invested within the above limits. 

2.  Net off your profit and losses in your stockbroking account. 

Most investors aren’t aware of the benefits of culling all the laggards in February, but it allows you to exit losing positions and net off the losses against profits, while rebasing your purchase prices higher to reduce future tax liability. 

 3. Start a Tax-Free savings account. 

The most under-utilised tax incentive is the Tax- Free savings account. This is because most people under estimate the compounding ability of the R33,000 maximum contribution per annum. Investors should also not be saving into a money market account but rather ETFs. Over time the growth achieved will be substantial and all returns and income are tax exempt. 

The week ahead: 


Other Economic data releases of interest… 


Long Term Ideas 

The Tax year closes soon, investors looking to lower their tax liability through retirement savings should contact us for the various options we provide. Email invest@protrade.co.za for further information with Retirement Savings in the subject line.