Staff author
That R500 you gave to charity? SARS owes you for it
Giving money to a registered charity actively lowers your tax bill. Section 18A of the Income Tax Act lets you deduct these donations from your taxable income. You simply need an official tax certificate from the charity to claim your money back.
How it works
When you donate to an organisation holding Public Benefit Organisation (PBO) status, you reduce the amount of income SARS can tax you on. SARS caps this deduction at 10% of your taxable income. A standard bank statement showing the payment is completely useless here. You must provide SARS with the official Section 18A tax certificate issued by the charity.
Specific Scenarios
* Scenario 1: The monthly debit order. You donate R200 every month to a registered animal shelter. At the end of the tax year, the shelter emails you a Section 18A certificate for R2,400. You add this to your tax return to reduce your taxable income.
* Scenario 2: The disaster relief fund. You make a one-off R5,000 donation to a registered disaster relief organisation. They issue a Section 18A certificate with their PBO number. You claim this full amount as a deduction.
* Scenario 3: The school bursary. You contribute R10,000 to a recognized school bursary fund that holds PBO status. You provide SARS with the official certificate and immediately lower your tax liability.
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When you are not eligible
You cannot claim a deduction for giving cash directly to an individual. Contributing to an informal crowdfunding page or donating to an organisation that lacks official Section 18A approval from SARS also disqualifies you.
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Disclaimer:This article is for informational purposes only and does not constitute financial or tax advice, and is not exhaustive. Tax laws are complex and subject to change. We strongly recommend consulting with our registered tax practitioner to address your specific circumstances.