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Daily Maverick
24-04-2025
- Business
- Daily Maverick
The tax implications of an RA, unit trust and tax-free investment
Investors need to consider various tax implications when comparing the three product options. Question: I am 55 years old and earn R25,000 a month. I have no retirement savings and want to invest R5,000 a month to supplement my spouse's pension. Should I invest this in a retirement annuity (RA), unit trust or tax-free investment? Answer: Each of these products has its own tax structure in terms of tax breaks when you invest the money; tax on the investment build-up; and tax applied to any withdrawals. You will need to take these into account when comparing the three product options. (See the table below.) I will take you through the typical calculations a financial planner would make. For the calculations, I will work on you investing R5,000 a month for the next 10 years. I have assumed that inflation will be 5% and that the investment returns will be inflation +4%. Retirement annuity The R5,000 investment you make to the RA will come off your taxable income. This will save you an amount of R1,300 in tax each month. (See table on the top right.) You can invest this additional R1,300 a month in an RA, which means your R5,000 investment is actually R6,300, with the South African Revenue Service (SARS) in effect contributing the additional R1,300. If you invest R6,300 a month for 10 years, the investment should be worth R1,203,842. Now, with an RA, you are allowed to take one-third as a lump sum and the balance as a pension. (See the table below.) As you haven't taken a retirement lump sum before, the full amount of the lump sum will be free of tax, as the first R550,000 of a retirement lump sum is not taxed. It is recommended that you take a 5% drawdown from your retirement capital. This will give you R40,128 a year. This is too low to attract income tax, so your income and lump sum would be tax-free. (See the table below.) Tax-free investments and unit trusts You can only invest a maximum of R3,000 a month in a tax-free investment, so I will work on you investing the remaining R2,000 in a unit trust. After 10 years, the investment would be worth R1,007,288. (See the table below.) Drawings from the tax-free investment would not attract tax, whereas the drawdowns from the unit trust would trigger capital gains tax (CGT). However, the gain on these drawdowns should fall within the annual R40,000 CGT exclusion, so no tax is payable. The key difference is that the tax break when you invest the premiums makes the retirement annuity (RA) an attractive option. Returns I did some calculations and the unconstrained investments would have to deliver returns that are 5% better than the RA for the end value of the investment to be better than the RA. So, unless this can be achieved by the tax-free and unit trust portfolio, the RA would provide the best solution. DM Kenny Meiring is an independent financial adviser. Contact him on 082 856 0348 or at Send your questions to [email protected] This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.
Yahoo
16-04-2025
- Business
- Yahoo
Lawmakers want to create tax credits to incentivize employers to provide child care
() Lawmakers are eyeing tax credits to help businesses provide child care to attract and retain workers. Both Minority Leader Trey Stewart (R-Aroostook) and Rep. Tavis Hasenfus (D-Readfield) presented proposals to the Taxation Committee on Wednesday to create income tax credits for employer-supported child care, though to slightly varying degrees. 'Lack of affordable childcare affects parents' ability to accept a job, maintain steady employment or reduce the number of hours they can work,' Stewart said. 'This all impacts our economic growth as a state. We can do better on this.' Stewart's legislation, LD 203, would authorize an annual credit of 50% of the amount spent on child care, or $3,000 per child, whichever is lower. Hasenfus amended his legislation, LD 1555, to authorize the same amounts. However, Hasenfus' version also has a per business cap of $36,000, which he said is intended to ensure the credit isn't used without end and to give a leg up to small businesses. 'Small businesses in Maine also often struggle to match the larger businesses and the benefits that larger businesses are able to offer,' Hasenfus said. The bills also differ on how long unused credits could be carried over. Stewart's legislation permits carry over for up to 15 years, whereas Hasenfus' version is only up to five years. Both bills stipulate that the credit would be subject to ongoing legislative review starting in 2030. While the bill sponsors and members of the public who testified in support of the bills said a lack of affordable and available childcare is an issue across the state, they particularly highlighted the challenges in rural areas. According to a study from the Bipartisan Policy Center, since 2019, 81 licensed child care providers in Aroostook County have closed, while only 38 providers have opened, resulting in a net loss of care for at least 516 children. There are only 84 licensed providers across the County. Just in March, a large child care facility in Presque Isle that served 71 children and 20 infants closed, with zero infant care available at any center nearby, said Readfield resident Krysta West, who is the deputy director of the Maine Forest industry Council. West said members of the council commonly cite the lack of child care as a reason they're unable to attract employees and some have therefore taken it upon themselves to fill that gap. For example, Maine Woods and its parent company, Seven Islands, has begun the process of setting up the 'Little Saplings' child care center in Aroostook County. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX 'Making visions such as Little Saplings become a reality requires substantial investment,' West said. 'Although they've stepped up to invest in child care needs, public private partnerships and new policy solutions are desperately needed to ensure that these ventures remain viable.' States have taken varying approaches to address childcare affordability. New Mexico became the first state to offer free child care to families earning up to 400% of the federal poverty level, or about $124,000 for a family of four. Nearby Massachusetts and Rhode Island use the subsidy approach, providing financial assistance to help families pay for child care programs. Some do not think tax credits are the solution. Maura Pillsbury, tax policy analyst for the progressive Maine Center for Economic Policy, argued the state should instead reinforce and build on what it's already done — investments that lawmakers are also currently weighing whether to reverse at the request of the governor to help fill the budget deficit. In 2021, Maine started providing $200 stipends per child care worker to help alleviate worker shortages during the height of the pandemic. Those monthly stipends doubled as part of the $59 million allocation to overhaul child care in the last biennial budget, spearheaded by former Senate President Troy Jackson (D-Aroostook). The package also expanded eligibility for the Child Care Affordability Program, which provides child care subsidies. The Mills administration had initially opposed Jackson's plan because of an expectation that funding for it would be inadequate. This year, Gov. Janet Mills suggested reversing those recent investments by cutting $30 million for child care worker stipends to bring them back to 2022 levels, among other funding reductions to services such as Head Start. Pillsbury requested lawmakers instead reject these cuts, arguing tax breaks for businesses are less efficient and equitable than providing direct subsidies. 'If we want to attract and retain more people in a career that prepares our youngest residents for success and gives workers in every corner of our state the chance to stay in their jobs, we must do better by them,' Pillsbury said. Questions raised by Rep. Shelley Rudnicki (R-Fairfield) suggested she may be opposed to the tax credit approach but for different reasons. 'Why should I and other seniors like me, who had to pay for our own childcare and didn't get these credits, now have to pay?' Rudnicki asked. Referring to home day care options, Rudnicki also questioned whether it would be more effective to loosen child care regulations instead. 'Is this really the best way to go about this?' West argued it is. 'It gives employers flexibility to pursue the needs of their local community,' she responded. Rudnicki similarly suggested licensing changes during the hearing for a bill to increase the state's child tax credit. That plan from Senate President Mattie Daughtry (D-Brunswick) to double the state's child tax credit for children under six years old would be paid for by phasing out the benefit for the state's highest earners. During that hearing, child care providers argued that loosening restrictions would damage the quality of the care and that liability insurance would likely refuse to insure providers. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
04-04-2025
- Yahoo
Bill named after Ohio student hit, killed by driver near school making way through Ohio Statehouse
A new piece of legislation named in honor of an Ohio student is making its way through the Ohio Statehouse. [DOWNLOAD: Free WHIO-TV News app for alerts as news breaks] House Bill 203, named the Aspen Runnels' Law, was introduced on March 26. The bill could create harsher penalties for distracted driving in a school zone. TRENDING STORIES: Township administrator on unpaid leave after OVI arrest Officers investigating after 1 shot in Downtown Dayton 11 minors, 1 adult arrested after attempted car break ins As our news partners at WCPO in Cincinnati reported, the bill comes after two crashes involving Lakota Local School District students walking to and from school. The student the bill is named after, Aspen Runnels, died after being hit while in a crosswalk at an intersection near Lakota East High School in May 2024. Runnels' mother, Christina Alcorn, told WCPO that she hopes this 'will be a deterrent.' As currently written, H.B. 203 would: Increase the penalties for vehicular manslaughter and vehicular assault involving speeding or the commission of a traffic offense in an active school zone. Require doubled fines for certain traffic offenses that occur in an active school zone. Establish additional requirements for driver's license reinstatement for an offender who committed vehicular homicide or assault in an active school zone. Establish requirements governing the posting of signage in school zones warning motorists of the bill's increased penalties. WCPO reported that Alcorn and Trisha Parnell have been pushing for harsher penalties for distracted driving while in a school zone. Parnell's daughter, Maddy Beare, was hit by a car near Lakota West High School in 2018. H.B. 203 is currently in the Ohio State House Judiciary Committee. We'll continue to track the bill as it moves through the statehouse. [SIGN UP: WHIO-TV Daily Headlines Newsletter]
Yahoo
27-03-2025
- Politics
- Yahoo
Cox signs 100 bills into Utah law ahead of looming deadline
SALT LAKE CITY () — Gov. Spencer Cox signed 100 bills in the latest legislative review session Wednesday, bringing the total to 476 bills signed with just over 100 left to act on before the upcoming deadline. Cox has until tomorrow, March 27, to sign the remaining bills. According to Utah law, any bills that are not signed or vetoed by the deadline will still become law without the governor's review. PREVIOUSLY — 'I must respectfully decline': Gov. Cox vetoes judicial reform bill, signs 200 other bills The governor signed several notable bills into law this round, including ' which is a controversial bill changing Utah's mail-in voting system. This bill requires voters to opt in to the mail-in ballot system and changes the postmark deadline so only ballots that arrive by election day can be counted. Cox also signed multiple tax bills, including H.B. 106, 'Income Tax Revisions,' which will reduce the income tax rate from 4.55% to 4.5%, and ' which makes it so seniors making $90,000 a year or less won't have to pay income tax on their social security. Another notable bill signed in the latest review is S.B. 203, 'Judicial Standing Amendments,' which is a bill that limits who can have third-party standing in court and adds requirements for associations bringing a case on behalf of its members. Critics of the bill previously argued that this would make it harder for 'everyday Utahns' to challenge laws. Here's what the Utah legislature did with tax cuts in 2025 While the majority of the bills passed during the 2025 Utah Legislative Session have been reviewed by the governor, there are still a few controversial bills that have yet to be signed or vetoed. — a bill that would ban flags representing the LGBTQ+ community in schools and other government buildings — has yet to be addressed by Cox. A bill that would make Utah the first state to remove fluoride from its water — ' — is also awaiting the governor's review. H.B. 265, 'Higher Education Strategic Reinvestment,' has also yet to be reviewed. The bill could lead to greater budget cuts for universities, specifically for programs that do not align with the Utah State Board of Education's vision and requirements. Cox has one day left to review the remaining 105 bills before they become law — with or without his approval. Read the full list of newly signed bills below: H.B. 26 Road Jurisdiction Amendments Utah Housing Amendments School Safety Amendments English Learner Amendments H.B. 51 Higher Education Reporting Amendments H.B. 53 Litter Cleanup Amendments H.B. 76 Public Education Revisions Vaccine Amendments H.B. 91 Technical College Amendments H.B. 106 Income Tax Revisions H.B. 124 Education Industry Employee Privacy H.B. 127 Sexual Crime Amendments H.B. 131 Talent Ready Utah Program Amendments H.B. 142 Service Member and Veteran Amendments School District Contracting Amendments H.B. 184 School Trust Land Amendments H.B. 191 High School Credit Amendments H.B. 195 Firearm Retention Amendments Vehicle Traction Amendments Highway Expansion Impacts on Signage Amendments Stipends for Future Educators Grant Program Amendments H.B. 209 Homeschool Amendments H.B. 219 Charter School Funding Revisions H.B. 222 Access to Traffic Accident Evidence H.B. 228 Public Education Immunization Amendments Transportation Funds Amendments H.B. 233 School Curriculum Amendments Nuclear Power Amendments Medicare Supplement Insurance Amendments First Credential Program H.B. 261 Towing Modifications H.B. 265 Higher Education Strategic Reinvestment H.B. 281 Health Curriculum and Procedures Amendments H.B. 300 Amendments to Election Law Disability Coverage Amendments Higher Education Revisions H.B. 344 School Fees Amendments H.B. 345 State Park Road Amendments H.B. 355 Mining and Critical Infrastructure Materials Amendments H.B. 357 Medical Cannabis Modifications H.B. 360 Housing Attainability Amendments Drug Overdose Training Amendments Maternal and Infant Amendments H.B. 365 Mental Health Care Study Amendments H.B. 368 Local Land Use Amendments H.B. 379 Population Data Amendments H.B. 380 Presumption of State Jurisdiction Amendments H.B. 390 Religious Expression in Higher Education H.B. 404 Government Employment Amendments H.B. 410 Child Care Amendments Municipality Regulation of Open House Amendments H.B. 424 School Activity Eligibility Commission Amendments H.B. 428 Property Tax Changes Rural School Funding Amendments S.B. 9 Revenue Bond and Capital Facilities Amendments S.B. 13 Property Tax Reimbursement Amendments Property Tax Notice Amendments Services for Department of Defense Civilian Employees S.B. 23 First Home Investment Zone Amendments Refugee Services Amendments S.B. 42 Consumer Protection Amendments S.B. 44 Professional Licensure Amendments S.B. 45 Juvenile Court Procedures Amendments Youth Electronic Cigarette, Marijuana, and Other Drug Prevention Program Sunset Extension Behavioral Health Amendments S.B. 49 Insurance Investment Amendments Newborn Relinquishment Amendments S.B. 64 Medical Cannabis Amendments S.B. 65 Medication Assisted Treatment Amendments S.B. 70 Consumer Reporting Amendments S.B. 71 Social Security Tax Revisions S.B. 78 Homeless Individuals Protection Amendments Autopsy Photo Amendments S.B. 86 Workplace Protection Amendments S.B. 96 Advanced Air Mobility Amendments S.B. 115 Substance Use Disorder Revisions Domestic Relations Recodification S.B. 120 Controlled Substances Modifications Metal Purchase and Theft Amendments Health Care Decisions Act Amendments S.B. 139 Mineral Rights Amendments S.B. 142 App Store Accountability Act S.B. 146 Glucagon Amendments S.B. 164 Modifications to Election Law Child Welfare Amendments Housing Affordability Amendments Throughput Infrastructure Funding Amendments S.B. 190 Workers' Compensation Modifications S.B. 195 Transportation Amendments S.B. 201 Real Estate Amendments Judicial Standing Amendments S.B. 204 Right to Appeal Amendments S.B. 213 Sales and Use Tax Modifications S.B. 217 Recycling Waste Amendments Health Care Services Platforms Abandoned Aircraft Amendments S.B. 250 Community Development Modifications Railroad and Transportation Amendments S.B. 268 Rules Review and General Oversight Committee Amendments S.B. 272 Micro-education Entity Amendments Matthew Drachman contributed to this reporting. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Express Tribune
08-03-2025
- Business
- Express Tribune
Gold prices rebound Rs3,000/tola
Listen to article After experiencing a decline in the previous session, gold prices in Pakistan rebounded in line with an upward trend in international markets. In the local market, the price of gold per tola rose by Rs3,000 on Friday, reaching Rs307,000. According to the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price of 10-gram gold increased by Rs2,571, bringing it to Rs263,203. On Thursday, gold prices had dropped by Rs3,000 per tola, settling at Rs304,000 in Pakistan. Meanwhile, international gold prices also witnessed an upward movement on Friday. As per APGJSA, the global gold rate stood at $2,921 per ounce (including a $20 premium), reflecting a $28 increase for the day. Adnan Agar, Director at Interactive Commodities, commented on the gold market trends, stating that the market has been relatively stagnant for the past few days, fluctuating between $2,916 and $2,930 per ounce. He highlighted that the market has been stuck in this range for the last four days, and a breakout on either side would determine the next movement. Agar further explained that if gold closes above $2,930, an upward trend is expected, whereas if it drops below $2,890, a downward trend could be seen. However, given the current market conditions, a slight downward movement seems more likely, especially with the weekend approaching and renewed tariff impositions. Nonetheless, if gold manages to close above $2,930, any downside risks would be negated, and an upward trend would follow. Globally, gold prices edged up on Friday, poised for a weekly gain on safe-haven inflows and a US jobs report revealing lower-than-expected job growth in February, suggesting the Federal Reserve is on track to cut interest rates this year. Spot gold added 0.3% to $2,918.11 an ounce. Bullion has gained over 2% so far this week, as US President Donald Trump's ever-shifting tariff policies fanned uncertainty. Meanwhile, the Pakistani rupee saw a slight decline against the US dollar, depreciating by 0.05% in the inter-bank market on Friday. By the end of the trading session, the rupee settled at 279.97, marking a loss of 15 paisa against the US dollar. A day earlier, it had closed at 279.82. On the global front, the US dollar remained near a four-month low on Friday as fluctuating tariff policies fuelled uncertainty and raised concerns about economic growth in the United States. Investors awaited the key jobs data for further direction.
