Treasury to deal poor families a blow with ‘school fees’ tax

Johannesburg – The National Treasury has proposed changes that if passed will severely limit the ability of thousands of low-income families to receive tax-exempt bursaries for their children.

Recent public hearings held by the Treasury on the proposed changes have received hundreds of submissions from the public opposing the change, including employers, schools and parents who use this unique and progressive incentive.

Marli Botha, a manager at SmartFunder, said most families that benefit from the incentive are black, low-income households.

She said the alteration, should it go ahead, will make it difficult for thousands of families to pay for quality education, especially significant in a post-COVID-19 economy.

“In 2006, the National Treasury decided to make salary sacrifice as a component of non-taxable bursaries allowable.

“An employee originally had to earn less than R100 000 a year to qualify for the incentive, but National Treasury increased this limit a number of times since 2006 to allow for more people to use it, and today employees earning less than R600 000 per annum qualify for this benefit,” said Botha.

“This is going completely against the tide of our government’s commitment to make access and funding to education more accessible and affordable in SA and has raised many eyebrows among many stakeholders.”

The bill has already been passed by the National Assembly and then voted on by the National Council of Provinces. It will now be sent to the Presidency for consideration.

Ziyabukwa Ntantla, a parent, said the government should reconsider the bill as the current incentive worked well.

“I used to struggle paying my children’s transport every month to an extent that my children were left stranded at school for hours. “Since I joined the incentive, the tax relief enables me to pay the school transport regularly,” said Ntantla.

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