Latest news with #LatitaAfrica
The Star
18-07-2025
- Business
- The Star
How South Africans can pay less tax without risking SARS penalties
Mthobisi Nozulela | Published 2 days ago South Africa has some of the highest tax rates in the world, but there are legal methods taxpayers can use to reduce their tax burden and retain more of their income. With personal income tax rates reaching as high as 45% for individuals earning above R1.8 million, and with the country's tax-to-GDP ratio expected to approach 25% in the coming years, many South Africans are feeling the pressure. However, in an interview with radio station Kaya 959, Roxanna Naidoo, Head of Global Strategy at Latita Africa, said there are other legal ways South Africans can use to pay less tax. "I'm a very strong advocate for tax avoidance and how to ensure that you're optimising your tax incentives legally. And there are quite a few ways," Naidoo said. Naidoo explained that many taxpayers miss out on important deductions simply because they don't fully understand what qualifies. "So, the tax system actually allows you to reduce your liability. And there are a few mechanisms there, but taxpayers aren't aware of that," she said. "We know the most common one is your retirement annuity contributions. They are deductible up to a certain limit. Then the second common one, again, is your medical contributions, but also out-of-pocket medical expenses. People forget about those". She also stressed that out-of-pocket medical expenses can also qualify for tax credits, and business-related travel costs may be deductible. "That can also qualify for medical tax credits. Then, if you earn commission or you travel for work, you may also qualify to deduct business travel expenses. That's where keeping those receipts comes in as very important, keeping all of those records" Naidoo also warned taxpayers to be cautious with SARS auto-assessments, which are pre-filled tax returns based on third-party data like employer records and medical aid contributions. "If you accept the assessment without checking, you risk under-declaring income or even losing out on those deductions that you should be getting. "Also, if SARS audits you later, and they do this sometimes up to five years down the line, they'll ask you for that documentation. And if you don't have it, they can then reverse deductions and charge penalties and interest. So, always check your assessment before accepting it and keep those records of everything, just in case" IOL News [email protected] Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
16-07-2025
- Business
- IOL News
How South Africans can pay less tax without risking SARS penalties
A simple guide that won't get you in trouble with the tax man Image: Pixabay South Africa has some of the highest tax rates in the world, but there are legal methods taxpayers can use to reduce their tax burden and retain more of their income. With personal income tax rates reaching as high as 45% for individuals earning above R1.8 million, and with the country's tax-to-GDP ratio expected to approach 25% in the coming years, many South Africans are feeling the pressure. However, in an interview with radio station Kaya 959, Roxanna Naidoo, Head of Global Strategy at Latita Africa, said there are other legal ways South Africans can use to pay less tax. "I'm a very strong advocate for tax avoidance and how to ensure that you're optimising your tax incentives legally. And there are quite a few ways," Naidoo said. Naidoo explained that many taxpayers miss out on important deductions simply because they don't fully understand what qualifies. "So, the tax system actually allows you to reduce your liability. And there are a few mechanisms there, but taxpayers aren't aware of that," she said. "We know the most common one is your retirement annuity contributions. They are deductible up to a certain limit. Then the second common one, again, is your medical contributions, but also out-of-pocket medical expenses. People forget about those". Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad Loading She also stressed that out-of-pocket medical expenses can also qualify for tax credits, and business-related travel costs may be deductible. "That can also qualify for medical tax credits. Then, if you earn commission or you travel for work, you may also qualify to deduct business travel expenses. That's where keeping those receipts comes in as very important, keeping all of those records" Naidoo also warned taxpayers to be cautious with SARS auto-assessments, which are pre-filled tax returns based on third-party data like employer records and medical aid contributions. "If you accept the assessment without checking, you risk under-declaring income or even losing out on those deductions that you should be getting. "Also, if SARS audits you later, and they do this sometimes up to five years down the line, they'll ask you for that documentation. And if you don't have it, they can then reverse deductions and charge penalties and interest. So, always check your assessment before accepting it and keep those records of everything, just in case" IOL News Get your news on the go, click here to join the IOL News WhatsApp channel
IOL News
19-05-2025
- Business
- IOL News
How Budget 2025-26 could reshape service delivery and accountability
Supporting low-income families amid fiscal constraints in the upcoming budget" Image: File Analysts have emphasised the need for the National Treasury to allocate more resources toward improving service delivery, complemented by stronger accountability measures to ensure efficiency and transparency as the Finance Minister prepares to present the '3.0 Budget' for the 2025-26 financial year. Among other things, the budget will focus on addressing the significant R75 billion shortfall, which could shape the country's economic future. Kabelo Moutloatse, a tax accounting specialist at Latita Africa, expressed concern over possible adjustments to business taxes in the revised budget. 'Any increase in business taxes could undermine foreign investment confidence and reduce the return on investment (ROI),' he explained. He said businesses might raise prices or cut costs to protect profits. He argued that increasing prices could lead to decreased consumer spending over time, affecting overall turnover. 'Conversely, cost-cutting measures—such as layoffs—could result in job losses, especially for the unemployed and low-income workers. These potential outcomes highlight the importance of carefully balancing fiscal policy to support economic growth and employment.' Supporting Low-Income Families Amid Fiscal Constraints Moutloatse said that another pressing issue is how the government plans to support low-income families, emphasising that with the reversal of the VAT increase, the government will need to find alternative revenue sources to cover the projected shortfall. Moutloatse suggests that prioritising spending on essential services like healthcare, education, and housing is critical to ensuring that vulnerable populations are not left behind. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Efforts to Reduce Inequality and Support Small Businesses Although the specifics of the revised budget have not yet been released, measures to promote economic inclusion are expected to be included. Moutloatse advocated for increased support for small businesses, particularly those in disadvantaged communities. 'Fostering and nurturing small private enterprises is essential for creating jobs and stimulating economic growth,' he noted. He emphasised that the government should focus on empowering small businesses, key employment drivers, rather than relying solely on direct government employment initiatives. Impact of Tax Policies on Small Vendors and Informal Traders A longstanding concern is the R1 million VAT registration threshold, which has existed for over a decade. 'For many new businesses, reaching R1 million in revenue within 12 months triggers VAT registration,' Moutloatse explained. "However, this threshold may no longer be appropriate as it can unfairly burden small and emerging businesses that are still growing." He added that many small vendors operate informally to avoid tax compliance fears, although they often benefit from lower tax rates available to qualifying small businesses. He stressed that new tax policies should be practical, not just legal formalities, to support small entrepreneurs genuinely. Reassuring Poor Communities and Promoting Poverty Alleviation Moutloatse highlighted the need for the government to reassure poor communities that their needs will be prioritised. 'This requires more targeted resource allocation and effective accountability measures,' he said. According to Moutloatse, potential strategies include expanding affordable youth skills development programs and adopting a realistic approach to job creation, focusing on empowering small private businesses rather than short-term government projects alone. He argued that such measures could provide more sustainable pathways out of poverty. Economist Dawie Roodt said the question was whether there will be a further reduction in the increase on the various social grants and the salary increase for civil servants. 'If you can't cut back on spending on people, then you cut back on spending on capital. Although he is going to say he is going to increase spending on A, B and C, that is probably not going to happen because we simply do not have the money. 'I think what is going to happen is that they will probably borrow more money than what he initially had in mind,' Roodt said. IOL Politics
Zawya
10-04-2025
- Business
- Zawya
Updated carbon tax framework and its impact on high-emission industries
Carbon tax was first implemented in South Africa in June 2019, with the aim to cut emissions to between 350 and 420 million tonnes by 2030, as per the Paris Climate Accord. However, after admitting South Africa would be unable to meet its 2030 targets, the president's office committed to net-zero emissions by 2050. Image source: jordano2000 – In order to achieve this, SA government has revised the carbon tax incentives and deterrents, which has lead to a decrease of the tax-free carbon allowance and an increase of the carbon tax rate. This will have significant implications across various industries, especially for carbon-intensive ones. Phase 2 of the carbon tax framework is set to commence in 2026. Roxanna Naidoo, head of Global Strategy at Latita Africa, outlines some of the key revisions and the impact they will have on different industries. One of the biggest changes is a cut in the tax-free carbon allowance from 60% to 30% by 2026. This is meant to encourage companies to reduce their carbon emissions, says Naidoo. Every year until 2030, there will be a further annual reduction of this allowance by 2.5 percentage points. Meanwhile, government is increasing the offset allowance for combustion emissions from 10% to 25% to encourage companies to invest in approved carbon offset projects in order to reduce their carbon tax liability. Impact on carbon-intensive industries The reduction in tax-free allowances will substantially raise the tax liabilities in traditionally carbon-intensive industries such as mining, steel, and cement production. 'This escalation in operational costs may compel these sectors to invest in cleaner technologies and enhance energy efficiency to mitigate financial impacts,' says Naidoo. 'Although the increased offset allowance offers some relief by permitting greater use of carbon offsets, it may not fully counterbalance the heightened tax burden.' The energy sector, led by state-owned Eskom with its heavy reliance on coal-fired power generation, will also face increased financial pressure. Here the revised tax structure aims to encourage a shift towards renewable energy sources without directly passing additional costs onto consumers, according to Naidoo. However, the transition may necessitate significant investment in renewable infrastructure and could influence electricity pricing strategies. Staying competitive For export-oriented industries, the higher domestic carbon tax may bring some advantages in the global context. South African products are likely to benefit from the reduced carbon price differential, potentially mitigating additional tariffs on exports into jurisdictions with carbon tax frameworks such as the European Union's Carbon Border Adjustment Mechanism (CBAM). 'This alignment with international carbon pricing can enhance the global competitiveness of South African goods,' says Naidoo. She points out that the policy changes are also creating opportunities for growth in renewable energy and carbon offset projects. 'Companies may increasingly invest in renewable energy initiatives to reduce taxable emissions,' she says. 'Additionally, the expanded offset allowance incentivises the development of projects that generate carbon credits, fostering innovation and investment in sustainable practices.' While South Africa's stricter carbon tax policy will present challenges, particularly for carbon-intensive sectors, it also offers opportunities for innovation, investment in cleaner technologies, and alignment with global carbon pricing mechanisms. Naidoo advises industries to proactively adapt to these changes to maintain competitiveness and contribute to national and global climate objectives. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
