Tax: Crunching The Numbers

Before the tax year comes to an end, there are a few things you can do to make the most of your tax benefits. But remember: investment decisions should never be done purely to receive these benefits.

- Simon Brown

February marks the end of the tax year for South Africans, and there are a number of things you can do to be smarter about your tax. However, please note: I am a taxpayer and not a tax professional. You may want to consult a tax professional around your personal situation. If a tax professional is out of your reach, chat to Sars. I have only ever found them to be very friendly and extremely helpful (even offering pointers on how I could reduce my tax liability).

First up is the contribution to the pension scheme you’re involved in. This could be your employer’s pension or provident scheme and/or a personal retirement annuity (RA). The first 27.5% or R350 000 (whichever is smaller) of your income can be paid into a pension scheme and will be deducted from your taxable income. You can pay in more, but if you exceed these limits, you won’t receive the tax benefit.