If tax rates rise soon then consumers running out of time to use current tax free allocation. (See: Brace yourselves – Income tax increase likely for 2017)
Consumers are encouraged to use tax free savings vehicles to ease the possibility of increased tax burden after 2017 National Budget Speech. Consumers have until 28 February 2017 to make use of their R30 000 maximum tax free allocation for the current tax year.
Aneesa Razack, CEO of FNB Share Investing says it’s vital to make use of this window even if you do not use the full R30 000 maximum allocation.
“To use their tax-free benefits, consumers have an option to buy tax-free shares with a R30 000 maximum lump sum or make R300 monthly contributions to reach their annual allocation without paying any tax on returns or dividends on the investment. The tax-free benefit also puts you in a position to earn better compound interest over time.”
Razack further cautions consumers not to rest on their laurels, noting that, “While 2017 is partly expected to be better than 2016, people should not leave their financial wellbeing to chance. One of the easiest ways to take charge of one’s financial independence is to constantly boost your cash reserves.”
For consumers who may be struggling to create financial room to start investing or saving, Razack recommends the following measures to get you started:
Review fixed and variable costs: Knowing your fixed and variable expenses will be a good start to your financial independence journey.