SARS makes R6 billion in taxes from two-pot system withdrawals
On Tuesday, the South African Revenue Service (SARS)'s Commissioner Edward Kieswetter told Parliament’s standing committee on finance that a further R670 million in outstanding tax debt is still due.
SARS commissioner Edward Kieswetter before Parliament’s Standing Committee on Finance. Picture: Phando Jikelo/Parliament
CAPE TOWN - Withdrawals from retirement savings under the new two-pot system have resulted in over R6 billion in taxes to the revenue service.
On Tuesday, the South African Revenue Service (SARS)'s Commissioner Edward Kieswetter told Parliament’s standing committee on finance that a further R670 million in outstanding tax debt is still due.
SARS says it’s received more than 1.4 million applications for two-pot savings withdrawals since the pension reform was effected in September.
Since its inception less than two months ago, pension funds have approved the payout of almost R26 billion in retirement savings.
SARS has approved 95% of the 1.4 million applications and declined 50,000.
According to Kieswetter, the revenue service can process a request within an hour.
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"The ones we’ve declined are typically where there is an identity issue, two different identity numbers, tax issue conflicts, and about 25,000 have been cancelled by the fund administrator due to incomplete data on their side."
Besides the withdrawals being taxed, Kieswetter says there are other considerations too.
"If you owe SARS debt, the debt will be deducted first."
Over 100,000 non-compliant taxpayers have been identified through this process.
Deputy Finance Minister Ashor Sarupen has expressed his concern about the impact the flurry of withdrawals can have upon actual retirement.
The new law allows one annual withdrawal from the savings portion of pension funds.