FNB Namibia has advised that calculations from tax experts indicate that substantial savings are to be made once the tax legislation is enacted at the end of June 2013.
Ester Kali, Executive: Retail & Business Banking at FNB Namibia added: “Individuals earning around N$180,000 will save around 32% on the tax bill yearly.
This means around N$1 150 monthly or N$13 800 yearly.
Those with a taxable earning of around N$ 700 000 could look at monthly savings of N$3 683 and yearly N$8 4700
“ This is no small change,” continues Kali. FNB Namibia would like to urge customers to use their additional funds wisely. “After all – you did not have or need the money in the past – and you should thus try and use the money wisely in order to get out of debt or decrease debt or something along these lines.” Kali gave her top five tips as to what to do with the money.
1. Pay off high interest debts (furniture accounts, cash loans, personal loans, clothing accounts, etc)
2. Invest the money into an Interest bearing or Unit Trust account, to make provision for vacations, weddings, or to acquire that lounge suite which you desire but could not afford yet, etc.
3. Further your studies or invest in the Education of your children.
4. Invest in your own property or do home improvements, use the extra money that you save on a monthly basis to pay your home loan. An additional payment of N$1150.00 on a home loan of N$700 000.00, at the current interest rate of 10.25%, over a period of 20 years would result in the following saving: Save on Interest: N$24857.03 and the Loan term is reduced with 1 year and three months.
5. Save for a rainy day.
Kali also continued to say that there are numerous other tax relief measures such as the stamp duty and transfer duties which mean additional cost reductions during property registration and the like.
She added: “FNB Namibia also offers various products with varying terms starting from basic savings account. We also have the Bank-your-change product which is unique to our bank. Each time the customer pays electronically by swiping, the left over cents are saved in a separate savings pocket, linked to the customer’s transactional account. So, if the amount I’m swiping for is N$5.35, the 65 cents will be saved in this pocket. But we’re giving the customer the option to up this amount – so each time customer swipes, the left over cents + a top-up amount will be saved.
You can choose between N$2, N$5, N$10 or N$20 and N$50.00 top-up per swipe.
This savings pocket draws very good interest rate. This is simply one of the greatest services on offer and it is free of bank charges, while the money can also be transferred from savings pocket to transactional account via Online or via ATM.”