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By André Wentzel, 25 February 2021
Quoting Archbishop, Desmond Tutu, he emphasised that hope is found in darkness, with light just beyond the clouds. For South Africans, now is the time to be hopeful, while also adopting a ‘zero-based budgeting’ approach that takes tax relief into account, along with increased excise duties and fuel levies.
André Wentzel, Solutions Manager for Sanlam Retail Affluent: Recurring Savings, says that the granting of above-inflation personal tax relief of R2.2 billion is particularly positive. “Many were expecting the worst when it came to tax increases, given that we currently have the largest tax shortfall on record. We applaud the government’s considered approach, which should help to reduce the tax burden on lower and middle-income households. If you are earning above the new tax-free threshold of R87 300, this means you’ll have at least R756 more in your pocket during the next tax year.”
Wentzel says that the tax relief gives South Africans a chance to take a deep breath and reprioritise their finances. “Minister Mboweni stressed that the biggest contribution the government can make to support economic recovery is getting its fiscal house in order. This can be extended to all of us. Now is the time to re-examine money matters to feel in control and cut expenditure where possible.”
Here are four further take-outs from the speech for South Africans, according to Wentzel:
Wentzel concludes, “To quote the Minister’s iconic words, ‘Continuing on our path was a difficult decision. But if you want an easy decision, go swimming.’ Right now, we urge South Africans to stick to their savings and investing goals when possible. In these tough times, now’s the moment to be hopeful, take stock, and reprioritise your finances.”