JSE launches tax free savings account

·15 Apr 2015

The Johannesburg Stock Exchange (JSE) has announced the launch of its Tax Free Savings Account (TFSA) initiative.

The new tax free savings regulations effective from 1 March was initiated by the National Treasury to improve savings amongst South Africans and reduce household indebtedness.

The JSE’s TFSA intends to align with the National Treasury’s goal, but also ensure that investors are given access to the exchange in a cost effective manner, the JSE said.

“Our offering of TFSAs will add to the JSE’s range of existing initiatives aimed at improving retail participation on the exchange. It is our intention to support and improve South Africa’s culture of savings by providing investment products through a tax free savings account,” said Mpho Ledwaba, head of marketing at the JSE.

The exchange’s offering will be rolled out in collaboration with approved stockbrokers in providing a platform which allows for individuals to invest in selected JSE listed instruments, such as Collective Investment Scheme (CIS) Exchange Traded Funds tax free. These ETFs will enable investors to diversify their risk by buying into a basket or variety of securities through a single product security.

“Our brokers have been carefully selected to guide investors along their investment and savings journey, by providing them with information and bespoke financial advice,” said Ledwaba.

The JSE’s TFSA offers potential investors the following features and benefits:

Investment in pre-selected Exchange Traded Funds
Limited to investing R30 000 annually and limited to a R500 000 lifetime contribution
No tax on interest earned
No Dividend Withholding Tax on dividends earned
No Capital Gains Tax
No Securities Transfer Tax on purchases