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Freepik.com
MONEY BASICS
with MARTIN HESSE
THE TAXES YOU PAY AS AN individual, you probably pay more to the government than you realise. It’s to your advantage to know about the different types of taxes, as you can then look at ways to pay less tax or, as the financial planning experts say, become more “tax efficient”. Note that finding ways to reduce tax should not be confused with avoiding paying taxes that are rightfully due – that is against the law. To paraphrase a well-known
poem, “How does the government tax thee? Let me count the ways.” INCOME TAX If you earn an income, you must pay tax on that income, whether it is in the form of a salary, commission, pension income, or earnings from investments or rental property (taxes on investments are discussed separately below). Against what you earn in a tax year, you may deduct expenses incurred in
producing that income – such as maintenance expenses on a rental property. You can also deduct contributions to a retirement fund and donations to designated charities. For the 2020/21 tax year, if your annual taxable income (gross income minus deductions) is below the threshold of R83 100, if you are younger than 65 years of age, you do not pay tax. If you are 65 or older, the tax threshold is R128 650, and if you are 75 or older,
