Positive news for investors from Finance Minister Enoch Godongwana’s 2022 budget speech:
No increase in the main taxes on investments:
- Capital Gains Tax (CGT) remains the same (maximum effective rate of 18%).
- Dividend withholding tax was also kept constant at 20%.
Individuals will have more after-tax money
- Individuals under 65 years of age earning up to R91 250 will not be liable for income tax;
- for those between 65 and 75, that figure is R141 250 and;
- for over 75s, the tax threshold is R157 900.
No changes were announced.
In addition to tax relief for contributions up to 27.5% of total income (capped at an annual contribution of R350 000), all the income and gains in a retirement fund are tax-free until retirement age. On retirement date, the first R500 000 of the lump sum withdrawal is taxed at the 0% rate.
VAT stays at 15%
Source: 2022 Budget / Sanlam