Listen: The SA tax system punishes investments and income generation

The Personal Finance Podcast Show with Ruan Jooste

The Personal Finance Podcast Show with Ruan Jooste

Published Oct 9, 2023


There is very little which is not taxed in South Africa, from sales to sins, even savings. As a matter of fact, the South African tax system is structured in such a way that it actually punishes investments and income generation. The more wealth you create, the more taxes you have to pay.

Incentives are also few and far between, are not being adjusted for inflation, and benefits are stingy at best. The downgraded medical aid contribution and scrapped income protection deductions are a case in point.

In fact, policymakers have become pretty hostile towards capital creation by subjecting it to a range of taxes, intermediary costs and regulatory charges. And the numbers show it. South Africa's Household Saving Ratio is at an all-time low of -0.5%. So on average South African residents save less than nothing. That is an alarming rate.

It is for that reason, that I invited Ettiene Retief to be my guest today, because it is possible that individual investors might not be aware of what taxes are payable when they buy into or sell out of an investment.

Ettiene is a Tax Specialist, with more than 23 years’ experience in anything that goes with it. He is also the chairman of the National Tax and SARS Stakeholder Committee of the South African Institute of Professional Accountants (or SAIPA for short) and Centre of Tax Excellence. So he is well-placed to provide clear and practical insights for our listeners on advice on how individual investors can make smart tax-informed decisions for their investment portfolios