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The Benefits of Personal Tax Planning in South Africa

As we already know, the financial planning process pays attention to several components of an individual’s personal portfolio.

One of these very important components is known as personal tax planning and no financial plan should exclude it.

personal tax planning in south africa

Tax Planning in South Africa – What is Tax Planning?

Tax planning is the process of analysing your financial situation purely from a tax perspective in order to take steps that ensure and enhance your tax efficiency.

This is a crucial part of any financial plan as it aims to reduce tax liability while maximising investments, retirement annuities and facilitating your ability to save as much as possible.

In order to be as tax efficient as possible, you will need to consider the tax consequences of every single investment or transaction you make.

There are no laws in South Africa that prohibit individuals from finding ways to minimise their tax burden but it’s important to know where the line is between tax planning and tax avoidance.

How Does Tax Planning in South Africa Work?

Tax planning takes certain aspects of your financial situation into consideration which include:

  • The timing of your income
  • The size of your purchase
  • The timing of your purchase
  • Careful planning for other expenditures
  • The selection of investments
  • Types of retirement plans that complement the tax filing status
  • Tax deductions

Tax Planning Strategies

There are various strategies that can be used in tax planning. However, not all methods are relevant to everybody.

Therefore, it’s important to seek advice from one of our financial advisors in Johannesburg to find out which of the following tax planning strategies are right for you:

Medical Aid

When you contribute to a medical aid, you can deduct a fixed amount per month for each member of the medical aid.


Do something good and get rewarded for it. When you donate up to 10% of your taxable income to a public benefit organisation, you can claim a tax deduction on the donation.

However, it’s important to ensure that whichever organisation you choose to donate to is registered with SARS and is able to issue you with a valid tax certificate.

Open a Tax-Free Savings Account

As a way to encourage South Africans to save more, SARS allows taxpayers to save up to R33 000.00 per year and R500 000 in their lifetime without getting taxed.

There are special tax-free savings accounts that are designated to this type of tax planning strategy and it’s important that these are used in order to avoid paying capital gains tax.

Invest in a Local Start Up

By investing in a venture capital company, individual investors are entitled to deduct the full amount of their investment from their taxable annual income.

Pension, Retirement Annuities and Provident Funds

Contributing to one of these savings vehicles and not withdrawing from them prematurely is crucial. You may deduct up to 27.5% of your retirement contributions with an annual limit of R350 000.00.

Olemera – Financial Advisors in Johannesburg

Effective tax planning depends on the extensive knowledge that our financial advisors have after years financial planning experience.

There are many tax planning strategies that can be integrated into your financial plan. However, not all of them are applicable to everyone.

Therefore, our financial advisors are committed to finding the most appropriate and effective way to enhance your tax efficiency based on your individual profile.

For more information about tax planning or to find out more about our financial planning services, please don’t hesitate to contact us for your personal tax planning needs.

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