Thato & Trevor discuss the 2023 Budget Speech

Trevor: Thato:

Hi Thato. Did you listen to the latest Budget Speech?

I was happy to hear about the solar panel tax incentive. It will definitely help me.

Hey Trevor. Yes I did. It was good to hear that there are a few new benefits that tax payers can claim.

Yes, the 25% rebate (up to R15 000 per tax payer), will help me as I’m planning to install panels this year. Remember, your spouse can also claim a rebate!

It also looks like we’ll be able to get more tax-free cash when we retire?

It might not help you right now, but it will help when you retire. The retirement and withdrawal tax tables were adjusted up by 10%.

You can now get R550 000 tax free when you retire, instead of R500 000, if you did not take any cash before retirement.

If you take up to R770 000 in cash you pay 18% on R220 000 of that amount.

The next R385 000 you take in cash is taxed at 27%. Anything over R1 155 000 is taxed by 36%.

This does not mean that you have to take more in cash than you were planning to, but it does mean that you’ll get a little extra tax relief if you do take cash.

I see that they didn’t increase the interest exemption this year?

It wasn’t expected, as the Government wants people to save in a tax-free savings account (TFSA) instead.

That’s why you can make contributions of up to R36 000 each tax year. The growth is tax free, which means that it grows more over time compared to other taxed savings.

Thanks for the reminder. I still need to make my TFSA contribution for this year.

Yes – me too. Every little bit extra we save goes a long way!