How do I pay less tax?

PJ Botha • January 17, 2025

"The only things that hurts more than paying an income tax is not having to pay an income tax." Dewar, Thomas.

 

This quote is undoubtedly optimistic, but it also contains some truth. Tax payment is both a luxury and a hardship. Although you must pay taxes of some kind, there are ways to lessen your tax liability.

 

It's critical to distinguish between tax avoidance and tax evasion before we begin. It goes without saying that tax avoidance is against the law and unacceptable. Tax avoidance from an investing standpoint refers to avoiding paying needless taxes as a result of poor investment planning.

 

As February, the end of the financial year, is drawing near, now is the great time to assess your existing financial status and make the most of the tax benefits available to you.

 

 

There are the following choices:

 

Retirement Annuities

 

Retirement Annuities (RAs) are among the best options for tax planning. You can take advantage of the following noteworthy tax advantages: Your voluntary donations to a RA are tax deductible up to 27.5% of your taxable income, or R350 000. This is known as an individual's tax benefit. This implies that the money you save in a RA may be taken into account when calculating your income tax and subtracted from the amount of tax due to SARS.

 

For the duration of the investment, there are no applicable income, capital gains, or dividend taxes.

Depending on prior lump sum withdrawals, up to R550 000 of your lump sum payout may be tax-free upon retirement. The remaining amount is thereafter subject to taxation at the rates specified in the retirement lump sum tax table.

Neither a living annuity nor a RA are subject to estate duty.

Lump amounts received by beneficiaries upon the death of a RA investor are free from estate duty (with the exception of contributions that are prohibited).

 

Tax-free savings

 

Different to a RA, the contributions to a tax-free savings account are made from post-tax income and you don’t get the tax benefit on contributions.

 

However, you are free to take your money out whenever you choose. An excellent approach to supplement your retirement funds or save for a long-term objective, such as your children's university fees.

 

During the investment period, no income, capital gains, or dividend taxes are due, just like with a RA.

 

Remember that you have a lifetime contribution cap of R500 000 and an annual contribution cap of R36 000 (or R3 000 per month) for all of your tax-free savings accounts from all providers.

 

Additional tax tactics you may use include:

 

Tax loss harvesting: 

This tactic involves selling some financial assets at a loss to lower your tax obligation at the end of the year. You can use tax loss harvesting to offset capital gains that result from selling other investments or assets at a profit.

 

Utilise your exemptions: 

You are eligible for a R 40,000 annual capital gains exemption. Perhaps it's time to move across investment funds or take a profit on a well-executed investment.

You can also take advantage of an interest exemption for R 23 800 (R 34 500 for individuals over 65). Your investment plan may need to be reevaluated if your interest exceeds that amount.

 

Donations: You are exempt from donation tax if you donate R100,000 annually. To lower your estate for estate duty reasons, now is an excellent moment to give R 100,000 to a family trust or your kids.

You will also receive a deduction for your donation if it is made to a charity that has Section 18A approval.

 

The aforementioned can undoubtedly lessen the tax burden, but it won't eliminate it. Paying your fair amount of taxes is important, but you shouldn't pay more than is necessary.

PJ Botha

GESPREK OOR WELVAARTSKEPPING IN SUID AFRIKA

By Agulhas Besprekingsforum: Dr. Riaan Botha • October 1, 2026
Die gesprek het plaasgevind in Struisbaai se rolbal klubhuis en is bygewoon deur 35 persone. Die aanbieding wat ek gedoen het, het die persoonlike uitdagings van ’n welvaartskepper beskryf. Punte wat uitgelig is: Wat is jou passie? Kies ’n strategie om jou passie uit te leef. Kennis is die sleutel tot suksesvolle welvaartskepping. Leer goeie geld gewoontes aan. Positiewe uitkyk op die lewe - Beheer wat binne jou vermoë is. Bou ’n netwerk van goeie mense wat jy vertrou. Bou jou persoonlike handelsnaam. Welvaartskepping is ’n lang reis. Geen kitsrykdom nie. Bovest sal jou help met finansiële advies: Om persoonlike finansiële doelwitte te stel. Om ‘n monitor program op te stel vir beplande finansiële doelwitte. Daar het ’n goeie gesprek na die aanbieding gevolg. Die huidige werkloosheid situasie in SA is bespreek en dat veral jong mense hul eie besighede moet begin om persoonlike welvaart te skep. Aangesien die ’n ouer gehoor was in welvaart bewaring ook bespreek. Die voorsitter, Danie Schutte, het ten slotte sy dank uitgespreek dat daar ’n positiewe situasie vir welvaartskepping in SA uitgebeeld is. Dit is veral vir jong mense bemoedigend om nie oorsee te gaan werk soek nie maar hier plaaslik ’n inkomste te skep.

OUDERDOM = AANPASSINGS

By Dr. Riaan Botha • September 30, 2026
Een van die kenmerke van ouderdom is dat persone aanpassings moet maak aan jou lewenstyl om tred te hou met die verouderingsproses. Persoonlike finansiële begrotings word geraak deur veranderende omstandighede. Wanneer inkomste verdien word, word persoonlike welvaart geskep en wanneer afgetree word, word die aanpassing gemaak om die verworwe welvaart te bewaar en te geniet. Veranderinge in jou lewe word soos volg deur Andy Warhol in “Change your World” beskryf: “They always say time changes things, but you actually have to change them yourself.” (J.C.Maxwell, R.Hoskins. Change your World. 2021.) Hoe word suksesvolle aanpassings gemaak? Daar bestaan verskillende teorië oor wat gedoen moet word om suksesvol aan te pas by omstandighede. Die konsensus is dat daar eerstens ’n verandering in die manier van denke moet wees. Jy moet anders dink om aan te pas by jou nuwe omstandighede. Die pas afgetredene moet besef dat waar hy/sy as ’n werkende ’n inkomste verdien het, ’n aanpassing in denke moet plaasvind om die bestaande aftree kapitaal te bewaar en te geniet. Tweedens moet persone wat aftrede aanpassings maak , indien nodig, aan byvoorbeeld hul lewensstyl. Afhangend van hoeveel aftree kapitaal beskikbaar is moet seker gemaak word dat onttrekkings wat hul lewensstyl befonds nie die aftree kapitaal erodeer nie. Die belangrike beginsel geld dat jy nie jou aftree kapitaal moet oorleef nie. Die jaarlikse hersiening saam met jou Bovest finansiële adviseur oor die stand van aftree kapitaal, is daarom noodsaaklik. Dit is derdens belangrik om die aangepaste omstandighede te benut om jou nalatingskap te finaliseer. Opdateer jou testament en maak seker dat daar genoeg fondse beskikbaar gaan wees om die verwagte boedelbelasting te betaal. Ten slotte is dit belangrik dat die aksies wat geneem word met die aanpassing van jou lewe as ’n afgetredene, ’n verskil maak oor hoe jy verouder. Jou nalatingskap en oor hoe mense om jou gaan beleef, sal getuig of dit die moeite werd was.