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Pretoria - From March 2012, an employer’s contribution to an employee’s
retirement would be treated as a taxable fringe benefit, Finance
Minister Pravin Gordhan announced.
At the same time, employees would be allowed to deduct up to 22.5% of taxable income for contributions to approved retirement funds, up to a maximum of R200 000 per year.
With a view to protecting workers’ savings, it was proposed that the one-third lump sum withdrawal limit applicable to pension and retirement annuity funds should also apply to provident funds.
These changes would simplify administration and improve the fairness of the system.
On capital gains tax, the exclusion amounts would be increased from March 2011 as follows:
At the same time, employees would be allowed to deduct up to 22.5% of taxable income for contributions to approved retirement funds, up to a maximum of R200 000 per year.
With a view to protecting workers’ savings, it was proposed that the one-third lump sum withdrawal limit applicable to pension and retirement annuity funds should also apply to provident funds.
These changes would simplify administration and improve the fairness of the system.
On capital gains tax, the exclusion amounts would be increased from March 2011 as follows:
- For individuals and special trusts, from R17 500 to R20 000 annually;
- On death, from R120 000 to R200 000; and
- On disposal of a small business when a person is 55 years or older, from R750 000 to R900 000.
