Rules to rein in side hustles

REVENUE: TREASURY WANTS TO SLASH RING-FENCING THRESHOLD FOR 'SUSPECT' TRADES

- Amanda Visser

South Africans augmenting their income with a side hustle should take note of a proposed change to the threshold for ring-fencing of assessed losses from such trades.

Currently, the threshold for ring-fencing applies to taxpayers who fall within the highest income tax bracket of 45%, or R1.817 million for the 2026 tax year. The National Treasury now wants to slash it by almost a third, to R673 000.

The proposal forms part of the draft Taxation Laws Amendment Bill (TLAB), which gives effect to the announcements made in Finance Minister Enoch Godongwana's 2025 Budget Review.

Cliffe Dekker Hofmeyr says section 20A of the Income Tax Act (the ring-fencing mechanism) was first introduced to prevent individuals from continuously offsetting losses from certain trades against other sources of income, thereby reducing their overall tax liability.