Government considers bid to encourage savings

Finance minister Pravin Gordhan on Wednesday revealed the government’s bid to encourage voluntary savings in South Africa, consideration is being given to the introduction of  tax-exempt short and medium-term savings products.

The proposal is that individuals should be permitted to save up to R30 000 a year, with a lifetime limit of R500 000, in  registered savings or investment products that would be free of tax on interest, dividends or capital gains.

“The current tax free interest income thresholds will be reviewed and possibly phased out as part of this reform and dull details of the proposals can be found in the Budget Review,” said  finance minister Pravin Gordhan.