Fiddling while Rome burns
TFSAs do not tackle real issues
A critique of the thinking behind and the applicability of the tax-free savings plans toSouth Africa’s circumstances
Given the reality of unemployment, levels of poverty and the indebtedness, was the launch of the tax-free savings accounts (TFSAs) ever a good idea? It was stated to be an effort to addressSouth Africa’s widely publicised “lack of a savings culture”. But in reality are we as a nation perhaps guilty of “fiddling while Rome burns”.The landscapeOur unemployment, in particular youth unemployment, has been well documented. Out of a population of about 56-million people there are nearly 40-million who are unemployed, too old or too young to work. The World Health Organisation estimates thatabout 13-million of our fellow South Africans go to sleep hungry every night. The argument is that this part of our population is the target of our extensive grants system and that the tax-freesavings plan is more upmarket.