As many South Africans are aware, the cost of living is rising almost on the daily and there seems to be no break from the burden of fuel levies, school fees and the staggering cost of filling your cupboard with groceries.
Yet we still have to pay the Government its taxes. So why does SARS have to dig into your pockets?
Well, as it turns out, our tax money does a lot more than simply pay government salaries. Tax provides essential revenues of the government which are used, amongst other things, to help fund development programmes for under-resourced communities. So paying your taxes helps build a stronger economy, a better resourced country and of course ensures that all South Africa citizens have the chance to build a better life.
BUT still wouldn’t it be nice if you could cut yourself a break – a tax break that is?
A word from our Finance Character!
Do I qualify to axe my tax?
Taxpayers – natural persons, trusts, companies, or close corporations – can deduct from their taxable income, the amounts they donated to approved organisations, up to the value of 10 percent of their taxable income.
For natural persons, the term taxable income refers to the taxpayer’s taxable income, whether derived from trade or from a non-trading source, and after allowing all permitted deductions, but before the donation deduction. Taxable income excludes any retirement lump sum benefit, retirement lump sum withdrawal benefit and severance benefit. However, it includes taxable capital gains.
The donation must actually be paid or transferred during the year of assessment in order to qualify for a tax deduction in such tax year.
Any donations in excess of the 10 percent limit will be rolled over and carried forward to the succeeding year of assessment. It will thus be deemed a donation actually paid or transferred during the succeeding year.
This rollover treatment will continue to apply in respect of any future excesses.
DOWNLOAD SARS GUIDE
SARS - LAPD-IT-G17 - Basic Guide to Tax Deductible Donations - External Guide
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