South Africa: South Africa: Increase in the 'official interest rate' effective December 2022
The official interest rate is used to calculate the 'low or interest free loan/debt' fringe benefit. The official interest rate is defined in section 1 of the Income Tax Act as the repurchase rate plus 100 basis points (1%). A new official interest rate is effective from the first day of the month following the date on which the new repurchase rate came into operation.
The repurchase rate (repo rate) has increased from 6.25% to 7.00% on 25 November 2022. As from December 2022 the 'low or interest free loan/debt' fringe benefit should be calculated using the new 'official rate of interest', which is:
7.00% + 1% = 8.00%
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