National Treasury has published the draft Notice and Regulations required to allow the introduction of tax free savings accounts from March 1, 2015. The draft Notice lists the service providers that may offer tax-free savings and investments to the public and administer those accounts on their behalf, while the draft Regulations detail the products that will qualify as “tax-free investments” to be included in tax-free savings accounts.
The objective of introducing the tax free saving accounts is to encourage individuals to save, which would reduce their financial vulnerability and reliance on debt when there are unexpected shocks to their normal income or sudden large expenditures.
National Treasury further added that the draft regulations follows the principle that products qualifying as tax free savings and investment should be simple to understand, transparent in their disclosure and suitable for the majority of individuals making use of such savings and investment products.
The public has until 3 December to comment on the draft regulations.
