You can get a tax break... if you save

During the pre-budget speech on Wednesday morning, 26 February, Finance Minister Pravin Gordhan said it was essential that people started “developing a savings culture in South Africa” and found ways to “get out of the debt trap” as “consumerism was replacing society” both here and abroad.

The good news for those of us not earning massive amounts of cash is that government has announced that it will soon be offering us added incentive to save.

Considering South Africans are notorious for being ‘bad savers’ and we’re in tough economic times to boot, People’s Assembly was pleased to hear there are plans at foot to introduce tax breaks for saving plans. We read about this new development in the ‘Budget 2014: Peoples Guide’ publication issued by National Treasury and the South African Revenue Service (SARS) that was handed out to journalists with their nifty budget speech media packs.

Apparently in an attempt to provide people with incentive to save, we will soon be given tax exemptions for interest, capital gains and dividends for investments not in excess of R30 000 per annum per individual.

According to this report more details will be released over the course of the next twelve months.

Furthermore, the 2014 Budget provides for personal income tax relief for individual taxpayers earning below a maximum of R350 000 per annum. Tax brackets and rebates have been adjusted to offset the negative effect of inflation.

The bad news for drinkers is that the duty on alcoholic beverages, including beer, sparkling wine and spirits, will increase between 6.2% and 12%. Sparkling wine is increasing by 62c per 750ml bottle, beer is increasing by 9c per 340ml can and spirits are going up a further R4.76 per 750ml bottle. But wait, that not all. The tax on a 20-pack of ciggies is also increasing by 68c. Maybe it’s time to kick the habit, eh?

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