The South African Revenue Service (SARS) has received tax directives worth R4.1 billion in applications for the savings withdrawals in the two pot system.
SARS said it has received a total 161,607 tax directive applications. This includes the directives which have been cancelled.
A total of 159 853 relates to Savings Withdrawal Benefits, which is 98.9% of the total number of applications received from 1 -10 September 2024, which means SARS received an average of 17,964 tax directive applications a day.
SARS Commissioner Edward Kieswetter said contributions made to a pension or retirement fund were not taxed at the time of payment to the fund but deferred to the time the person retires and then taxed at a reduced rate.
However, when an individual withdraws now, they will be taxed at their marginal tax rate.
‘Applications for tax directives are submitted to SARS by the fund administrator via eFiling. The directive indicates to the fund how much tax should be withheld by the fund on behalf of SARS before p
ayout.
‘Taxpayers who owe SARS money must realise that this tax debt will be added to the tax on withdrawal from the savings benefit. But if there are payment arrangements in place to settle the debt with SARS, this debt will be deducted as per agreement between SARS and the Taxpayer. A tax debt that has been deferred will also not be deducted,’ the Commissioner said on Wednesday.
He indicated that the turn-around time for SARS to complete directive applications, without any human intervention, is no more than 24 hours.
The channels used by taxpayers to get more information from SARS about the new system include the SARS Online Query System on the SARS website and the SARS WhatsApp channel – 0800 11 7277 where taxpayers can do simulated tax calculations on their two pot withdrawals.
‘Applicants give three reasons why they want to make a withdrawal from the new system: a transfer due to divorce, a transfer to a retirement fund and a withdrawal by the taxpayer. As the situation is changing daily, SARS will
provide periodic updates on the numbers of withdrawals,’ SARS said.
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Source: South African Government News Agency