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Post budget speech commentary

27 February 2020 Standard Bank Wealth

Tax-Free Savings:
“The annual tax-free saving contribution limit increased from R33k to R36k but the lifetime savings limit was not adjusted and remains at R500 000. This move increases the attractiveness of the tax benefit on tax-free investments for individuals. We are confident that this will encourage more individuals to look at tax-free investments as a way of long-term saving. However, a move by government to increase the R500 000 lifetime limit would also have been welcomed.” – Kuhle Kunene Head of Wealth Advisory Standard Bank.

Personal Income Tax:
The biggest surprise is the personal income tax relief announced by the Minister. The above-inflation increases in the income tax brackets provides welcome relief to many consumers. This relief, in conjunction with lower inflation and the recently announced reduction in interest rates will make it easier for consumers to manage their already constrained personal budgets. Errol Meyer, Legal Specialist, Advisory, Standard Bank

Medical Credits:
Another welcome move is the increase in medical credits. In the 2018 Budget Review government chose not to increase medical credits with the purpose of accruing funding for the future rollout of National Health Insurance. However, this year taxpayers were fortunate that there was an increase in these credits albeit lower than inflation. Errol Meyer, Legal Specialist, Advisory, Standard Bank

Trusts used for estate duty savings purposes are being scrutinised and we can expect another round of anti-avoidance rules. Errol Meyer, Legal Specialist, Advisory, Standard Bank

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