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ADJUSTMENT OF THE OFFICIAL RATE OF INTEREST CONTEMPLATED IN PARAGRAPH 1 OF THE SEVENTH SCHEDULE TO THE INCOME TAX ACT, 1962
The South African Revenue Service (SARS) hereby notifies for general information that in terms of Government Notice No. 1045 published in Gazette No. 22757 of 17 October 2001, the Minister of Finance has, with effect from 1 October 2001, reduced the official rate of interest from 13 per cent to 10,5 per cent.
In view of the recent decreases in interest rates, it was considered desirable that the official rate of interest be adjusted accordingly.
The fringe benefit provisions contained in the Income Tax Act, 1962, provide that where a loan is obtained by an employee from his or her employer in terms of which no interest is payable or where the interest payable is less than the "official rate of interest", the difference between the amount which would have been payable if the loan was granted at the official rate and the amount actually paid by the employee, will be taxed as a fringe benefit.
Contact: Fani Zulu at 082 451 0457
Issued by: The Commissioner for the South African Revenue Service, 17 October 2001