What Is SARS Tax Credit?

By Dave Nyam •  Updated: 01/23/24 •  5 min read

Consider a tax credit as a magical ticket that reduces your tax liability. It differs from a tax deduction because it does not reduce your taxable income. No, a tax credit directly addresses the issue by lowering taxable income. Typically, taxpayers who fulfill specific requirements or do actions that benefit the economy or society are awarded these golden tickets. The South African Revenue Service (SARS) taxman distributes a range of tax credits. These include the property rates tax credit, the investment tax credit, the tax credit for medical scheme

fees, and the credit for economic development.

What is the SARS tax credit?

SARS tax credit means any tax credit that SARS manages. A tax credit lowers the tax that a taxpayer owes. SARS tax credits are for taxpayers who qualify or do good things for society or the economy. SARS tax credits have different shapes, like fixed, percentage, or reduction. Some SARS tax credits are:

Who qualifies for a medical tax credit?

The medical scheme fees tax credit lowers the tax for taxpayers who pay medical scheme fees for themselves and their dependents. The tax credit is a fixed monthly amount that grows with more dependants. It is not refundable, so it only lowers the tax and does not carry over. It helps with medical costs and makes things fairer and more equal.

To secure the tax credit, a taxpayer must be a person, not a body. They must forward fees to an authorized medical scheme or fund for themselves and their dependents. They should display proof of clearance, like a tax cert or a receipt.

The 2024/2024 tax credit rates are:

Who qualifies for tax rebates in South Africa?

A tax rebate lowers the tax that a taxpayer pays. A tax credit lowers the tax that a taxpayer owes, but a tax rebate lowers the tax after it is calculated. Tax rebates are for all taxpayers or some taxpayers based on age, income, or situation. In South Africa, these tax rebates are:

How do I know if I qualify for a SARS tax return?

A tariff return is a record you answer and forward to SARS to declare to them your earnings, outlays deductions, and tariff credits for a SARS tax year. It shows your tax liability or tax refund. In addition, a tax liability is the tax you owe to SARS, and a tax refund is the tax SARS owes you.

To see if you need a tax return, check these criteria:

AgeThreshold 
<6587,300
65-74135,150
>75151,100

What is the tax credit for medical schemes in 2024?

In 2024, taxpayers who pay fees to a registered medical scheme or a similar fund outside South Africa for themselves and their dependents will be eligible for a tax credit. This tax credit is a set monthly amount that grows with the number of dependents. However, it’s important to note that this tax credit is non-refundable. That means it can only lower your tax and won’t roll over to the next assessment year.

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