South Africa | Decrease in the Official Rate of Interest Effective June 2025
The official rate of interest, used to calculate the fringe
benefit for low-interest or interest-free debt, is defined in section 1 of the
Income Tax Act as the repurchase (repo) rate plus 100 basis points (1%). A new
official rate takes effect from the first day of the month following the change
in the repo rate.
On 30 May 2025, the repo rate decreased from 7.50% to 7.25%.
As of June 2025, the fringe benefit for low-interest or interest-free
debt must be calculated using the new official rate of interest, which will be:
- 7.25%
+ 1% = 8.25%.