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Have you opened a tax-free savings account?

12 August 2015   (0 Comments)
Posted by: Author: Ingé Lamprecht
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Author: Ingé Lamprecht (Moneyweb)

Initial take-up encouraging, but more education, innovation necessary.

Although initial numbers suggest several thousand tax-free savings accounts (TFSAs) have been opened since its introduction, a lot more education and product innovation may be necessary to incentivise a broader take-up – especially amongst lower income earners.

Some product providers were still mulling their options at the regulatory launch on March 1 this year and to an extent it is probably too early to gauge the initial success of TFSAs.

However, preliminary indications imply that aggressive marketing efforts by some product providers have paid off.

Yet, financial advisors Moneyweb have spoken to, said only a handful of clients have asked about TFSAs. And alarmingly, there are cases where investors have already withdrawn money from their accounts, perhaps suggesting that they don’t understand the long-term benefits.

Some products may also be inaccessible or too expensive for those with only R250 a month to invest.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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