{"id":848493,"date":"2026-01-25T10:00:00","date_gmt":"2026-01-25T08:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=848493"},"modified":"2026-01-23T17:50:03","modified_gmt":"2026-01-23T15:50:03","slug":"how-to-legally-pay-less-tax-in-south-africa-2","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/848493\/how-to-legally-pay-less-tax-in-south-africa-2\/","title":{"rendered":"How to legally pay less tax in South Africa"},"content":{"rendered":"\n

A financial adviser at Alexforbes, Zander Loots, has provided ways for South Africans to reduce the tax they have to fork over to SARS. <\/p>\n\n\n\n

Speaking in an interview with Classic Business<\/a>, Loots said that the last two months of this year are a narrow window before the financial year closes, and it is often the difference between smart tax planning and missed opportunities.\u00a0<\/p>\n\n\n\n

He explained that in the next few weeks, South Africans will either make one of the smartest financial decisions of the year or miss another opportunity that they certainly won\u2019t be able to get back in this tax year.<\/p>\n\n\n\n

According to Loots, February is such a critical moment because it marks the final chance to influence your taxable income for the year. With this in mind, he highlighted ways taxpayers can legally get some payback for their hard-earned money. <\/p>\n\n\n\n

One of the most effective tools available to taxpayers is the retirement annuity (RA). Loots said many people dismiss RAs because they believe the money is locked away forever. <\/p>\n\n\n\n

\u201cSome people hear \u2018retirement\u2019 and think this is money they\u2019ll never see again. However, at a practical level, an RA can reduce your tax bill today, not just in 30 years\u2019 time,\u201d said Loots.<\/p>\n\n\n\n

He explained that RA contributions are deductible against taxable income, up to legislated limits.<\/p>\n\n\n\n

\u201cIf you contribute R10,000 for the year, your taxable income technically reduces by R10,000,\u201d Loots said.<\/p>\n\n\n\n

\u201cDepending on where you fall on the progressive tax tables, SARS will rebate you that money when you submit your tax return.\u201d<\/p>\n\n\n\n

In other words, part of what you contribute effectively comes back to you through lower tax.<\/p>\n\n\n\n

Beyond the immediate rand-and-cents saving, Loots added that the real benefit is often overlooked.<\/p>\n\n\n\n

He explained that it actually drops you into a lower band, which means you pay less tax going forward.\u201d That saving can then be reinvested.<\/p>\n\n\n\n

\u201cThe money you get back is a great way to reinvest further into retirement annuities or other savings vehicles.\u201d<\/p>\n\n\n\n

Underutilised opportunity <\/h2>\n\n\n\n
\"\"<\/a><\/figure>\n\n\n\n

Loots also pushed back against the idea that retirement annuities are rigid and inflexible. \u201cMost people think you have to commit to a fixed monthly amount and that\u2019s it,\u201d he said. <\/p>\n\n\n\n

He noted that investors can make once-off contributions if they receive a bonus, a tax refund, or extra cash. <\/p>\n\n\n\n

\u201cYou can invest that money once-off into your retirement annuity without the hassle of fixed monthly debit orders,\u201d he said, making RAs far more adaptable than many assume.<\/p>\n\n\n\n

Loots also highlighted tax-free savings accounts (TFSAs) as a powerful\u2014though often underutilised \u2014complement to RAs.<\/p>\n\n\n\n

\u201cThey\u2019re different tools in the same toolkit. The big similarity is non-taxed growth.\u201d He explained that tax-free savings are not subject to tax on interest, dividends, or capital gains. <\/p>\n\n\n\n

While contributions are capped at R36,000 a year and R500,000 over a lifetime (excluding growth), Loots said the long-term impact can be substantial. <\/p>\n\n\n\n

\u201cClients who started tax-free savings in 2015 and contributed the maximum every year have seen significant tax-free growth. Their portfolios are in a very good place \u2014 and that can be used for retirement.\u201d<\/p>\n\n\n\n

Unlike RAs, tax-free savings also offer more access flexibility. \u201cYou can use it when you retire to pay off your home, create extra income, or keep it as an emergency buffer,\u201d Loots added.<\/p>\n\n\n\n

Used together, RAs and tax-free savings can significantly reduce lifetime tax while strengthening long-term financial security. <\/p>\n","protected":false},"excerpt":{"rendered":"

A financial adviser provided ways for South Africans to reduce the tax they have to fork over to SARS.\u00a0<\/p>\n","protected":false},"author":92,"featured_media":782514,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[16778,853,21727],"class_list":["post-848493","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-alexforbes","tag-south-africa","tag-the-south-african-revenue-service-sars"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848493","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/92"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=848493"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848493\/revisions"}],"predecessor-version":[{"id":848494,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/848493\/revisions\/848494"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/782514"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=848493"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=848493"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=848493"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}