2024 Tax legislative updates and their impact on limited companies and personal tax

The tax landscape in South Africa continues to undergo significant changes in 2024, with new legislative updates that affect both limited companies and individuals. These changes reflect the government’s ongoing efforts to boost revenue, close tax loopholes, and create a fairer tax system. This article examines the key tax legislative updates for 2024 and their impact on limited companies and personal taxation, while highlighting the benefits of outsourcing tax and accounting services to BPO providers like Accace.

Corporate income tax rate adjustment

In 2024, the South African government has maintained the Corporate Income Tax (CIT) rate at 27%, but with new incentives aimed at promoting investment in key sectors like renewable energy and manufacturing.

Impact on limited companies:

• Investment incentives: Companies in eligible sectors can benefit from tax breaks, encouraging further investment and expansion.
• Strategic tax planning: Businesses must carefully plan their investments to maximize the benefits of these incentives.
• Outsourcing benefits: Accace can assist companies in navigating these incentives, ensuring optimal tax planning and compliance with the latest legislative updates.

Strengthened anti-avoidance measures

SARS has introduced more stringent anti-avoidance measures in 2024, particularly targeting multinational companies and high-net-worth individuals. These include tighter regulations on transfer pricing, Controlled Foreign Companies (CFCs), and tax residency rules.

Impact on limited companies:

• Increased compliance burden: Companies must enhance their documentation and reporting practices to comply with the new regulations.
• Risk of penalties: Non-compliance with these measures can result in substantial penalties and legal challenges.
• Outsourcing benefits: By outsourcing to Accace, companies can reduce the risk of non-compliance. Accace’s experts ensure that all anti-avoidance measures are met, providing peace of mind and reducing administrative overhead.

Personal income tax bracket adjustments

The South African government has adjusted the personal income tax brackets in 2024, providing relief for middle-income earners while slightly increasing the tax rate for the highest earners.

Impact on personal tax:

• Middle-income relief: The adjustment results in more disposable income for middle-income earners, boosting consumer spending.
• Increased tax for high earners: High-income individuals face a higher tax rate, which may necessitate adjustments in personal tax planning strategies.
• Outsourcing benefits: Individuals, particularly high earners, can benefit from Accace’s tax planning services, which optimize tax liabilities and ensure compliance with the new tax brackets.

New deductions and credits for 2024

The government has introduced new deductions and credits aimed at promoting savings and healthcare, including increased limits for retirement fund contributions and enhanced medical aid tax credits.

Impact on personal tax:

• Retirement savings encouragement: Higher contribution limits encourage individuals to save more for retirement, with immediate tax benefits.
• Healthcare relief: Increased medical aid tax credits provide additional financial relief to those supporting dependents on medical schemes.
• Outsourcing benefits: Accace’s personal tax services ensure that all applicable deductions and credits are claimed, maximizing tax efficiency for individuals.

Why Outsource to a BPO Provider Like Accace?

Outsourcing tax and payroll functions to a BPO provider like Accace offers several key advantages in the complex 2024 regulatory environment:

• Expertise and compliance: Accace’s team of experts is well-versed in the latest tax and payroll regulations, ensuring full compliance and reducing the risk of penalties.
• Cost efficiency: Outsourcing reduces the need for in-house payroll and tax specialists, saving businesses the costs associated with training and software updates.
• Focus on core activities: By outsourcing administrative tasks, companies can focus on growth and strategic initiatives, leaving the complexities of payroll and tax to professionals.
• Scalability: Accace provides scalable solutions, allowing businesses to grow without worrying about the increasing complexity of payroll and tax compliance.

The tax and payroll landscape in South Africa for 2024 is characterized by significant changes that require careful navigation. For limited companies and individuals alike, staying compliant while optimizing tax liabilities is crucial. Outsourcing to a BPO provider like Accace offers a strategic advantage, ensuring that all regulatory updates are met with precision, while allowing businesses and individuals to focus on what they do best.

Michelle Martin

Managing Director | Accace Adept

Book a meeting with Michelle