Johannesburg Stock Exchange to offer retail investors tax free savings accounts
In a bid to help South Africans adequately prepare for their financial future the Johannesburg Stock Exchange is pleased to announce the launch of its Tax Free Savings Account (TFSA) initiative.
“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,” comments Mpho Ledwaba, Head of Marketing at the JSE.
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’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.
“One of the common barriers to investing is the lack of financial knowledge about the various financial products. Our brokers have been carefully selected to guide investors along their investment and savings journey, by providing them with information and bespoke financial advice,” says 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
“As a contributor to South Africa’s economy, our role at the JSE is to not only support economic growth, but ensure that we encourage South Africans to participate in private sector investment. TFSAs will ensure that we increase the level of individuals participating on the exchange whilst delivering on our promise to improve savings by providing low risk, tax free savings investment offerings,” Ledwaba concludes.