South Africa's bad savings culture is changing.
When should you begin saving? How can your business grow and save money at the same time? When is the right time to invest?
For things to undertake a real change at all levels, Government should be the initiator for a better financial education and innovation, like Elizabeth Senger explains for Itinews.co.za.
And that's why the National Treasury has stipulated that the maximum amount that an individual can invest per annum is R30 000 and the maximum lifetime amount is limited to R500 000 – any amount exceeding this will be taxed at 40%.
This means an investor who opens a tax-free savings account after 1 March and invests R30 000 each year will take exactly 16 years and 8 months to reach the R500 000 cap, Senger explained.
Tax-free saving accounts are a great saving solution for you as an employer but also for you as an individual.
For your company, your can use services like these to your advantage.
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It has been announced that Investec Cash Investments, a division of the Specialist Bank, is launching a tax-free savings account and to qualify, clients will need just R30 000 to invest (down from the R100 000 minimum investment traditionally required).
René Grobler, Head of Investec Cash Investments, explained the following:
"March 1st marks a truly exciting opportunity for the banking sector to support National Treasury's drive to improve household savings for all South Africans. We've reduced the Investec Cash Investments minimum investment amount significantly, in order to encourage more people to take advantage of what we believe to be a compelling product," says René Grobler, Head of Investec Cash Investments.
So how can you use the tax-free savings account incentive in your business?
When it comes to offering your employees a bonus, remember that it is essential that every employment contract cleary states the terms and conditions applicable to the payment of bonuses!
Your CEO should collect proper date and analyze business performance. You should receive examples of improved processes for your business and gain a stronger control over the tax payment.
Improve the way the system works when it comes about efficiency between company's departments. Use modern systems and improve reporting processes.
Make sure each aspect of accounting, tax management and tax compliance are protected against any errors!