Gross two-pot withdrawals top R43 billion

Posted on 1 Comment

More than R43 billion has been paid to retirement fund members who made withdrawals from their savings components, according to the latest statistics released by the South African Revenue Service (SARS).

The revenue-collection authority on Friday provided an update on the tax directives it has received and issued since the implementation of the two-pot retirement system on 1 September.

To date (31 January), SARS has received 2 664 279 applications for tax directives for savings benefit withdrawals. Of these, 2 403 379 tax directives were approved for funds to be released. The remainder were declined for a variety of reasons, including incorrect identity numbers or tax numbers.

Retirement funds had 10.9 million active (contributing) members in 2022, according to the FSCA’s Retirement Funds Statistical Report. This number includes members of all types of funds – privately administered, underwritten, and funds created by specific statute, such as the Government Employees Pension Fund. There is some double counting because some individuals belong to more than one retirement fund.

The gross pay-out of R43.42bn represents an increase of 24% compared to the gross R35bn that had been paid out when SARS issued a statement about two-pot withdrawals in November last year.

SARS said its two-pots calculator on WhatsApp has been used 90 283 times since implementation of the process. The simulated calculator on the SARS website, which forms part of the SARS Online Query System, has been used 952 403 times. SARS has also received 128 802 and queries through the voice channel, and 24 278 at branches.

Members can find out how tax they are likely to pay by using SARS’s two-pot calculator at https://tools.sars.gov.za/sarsonlinequery/Savings-Pot-Calculator

The calculator is also available on eFiling, the SARS MobiApp, and the SARS WhatsApp channel. Go to https://www.sars.gov.za/two-pot-retirement-system/ for information on how to download and use the calculators.

SARS encouraged taxpayers to use the digital channels, so they do not have to leave their homes or workplaces to stand in queues at SARS branches.

SARS reminds taxpayers who want to apply for a withdrawal to make sure they provide the correct tax number and identity number, and check whether they owe SARS any money.

Once a registered taxpayer has applied, a tax directive will inform the retirement fund and/or its administrator how much tax to deduct from a withdrawal.

Directive applications are accepted by SARS 24/7 and processed on every day of the year from 8am to 7pm. Unless a directive application is submitted outside of these hours, the response, if the taxpayer is compliant, will be sent to the fund within an hour.

Before the final amount is paid to the applicant, the retirement fund will be informed to deduct any outstanding debt on behalf of SARS. If a person has a debt arrangement with SARS, the withdrawal will not be affected. If there is a debt owed to SARS, it will be deducted in terms of such arrangement.

Tax is imposed on a savings benefit withdrawal at the taxpayer’s marginal tax rate, which ranges from 18% to 45%, depending on the person’s income bracket.

SARS repeated its previous warnings that taxpayers should not wilfully understate their income in an attempt to be taxed a lower rate.

Commissioner Edward Kieswetter said: “SARS is deeply concerned that 213 654 taxpayers have been identified where they have declared incorrect taxable income with the view to have a more favourable tax rate. If a taxpayer understates their income, they are intentionally involved in evading their tax obligation. A penalty will be imposed on taxpayers who have understated income. I wish to caution taxpayers to refrain from this unbecoming conduct that borders on criminality.”

1 thought on “Gross two-pot withdrawals top R43 billion

  1. I want to now what makes I do now I getting a letter at work toe getting my money I do have online I only get R800 at 2024and January I getting at my work R1600

Leave a Reply

Your email address will not be published. Required fields are marked *