This equates to almost half of the country's gross domestic product (GDP).
The National Treasury has now published a "long-awaited" discussion document on the taxation of these savings vehicles, stating that any changes to the CIS tax regime must align with efforts to encourage more savings.
However, the principles of a fair tax system will also be retained. South Africa's savings rate is 13.6% of GDP, according to 2023 World Bank development indicators.
The rate remains concerning, particularly when considering the efforts already put into encouraging savings through policy adjustments.
The Treasury committed itself in 2020 to review the income tax treatment of amounts received by these schemes' portfolios. The discussion document offers several proposals on how tax certainty can be achieved for CIS portfolios.
Income vs capital
This story is from the November 21, 2024 edition of The Citizen.
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This story is from the November 21, 2024 edition of The Citizen.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
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