SARS' two-pot system withdrawals reaches R21 billion

The South African Revenue Service (SARS) says a total gross lump sum of about R21.4 billion has been paid out to taxpayers, who have applied to utilise their Savings Withdrawals Benefit of the two-pot retirement system.

More than 1.2 million South Africans applied for the tax directive, with at least 1.14 million approved.

PICTURE: SARS

According to SARS, the remainder were “declined for a variety of reasons, including incorrect identity numbers and incorrect tax numbers, amongst others”.

“SARS reminds taxpayers, who want to apply for a withdrawal to make sure that they verify their tax numbers, have supplied the correct identity numbers, and that they do not have any outstanding debt with SARS,’’ said Edward Kieswetter, SARS Commissioner.

“After a registered taxpayer has applied, a successful tax directive informs the fund management how much tax to deduct from a withdrawal. Directive applications are accepted by SARS 24/7 and processed within an hour 365 days a year from 8am to 7pm. Unless a directive application is submitted outside of these hours, the response if the taxpayer is compliant be sent to the fund within an hour,’’ he added.

SARS explained that taxpayers with debt owed to it may be deducted if the taxpayer does not have a payment agreement in place.

“Before a final amount is paid to the applicant, the pension fund will be informed to also deduct any outstanding debt on behalf of SARS before any payout is made to the member. If a person has a debt arrangement with SARS, the withdrawal will not be affected. If there is debt owed to SARS, it will be deducted in terms of such arrangement,” he said.

Furthermore, Kieswetter said tax is imposed on the withdrawal at a rate ranging from 18% - 45%, depending on their scales. He warned that taxpayers, wilfully understating their income, are dodging their obligation to the revenue service.

 “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. Finally, I wish to caution taxpayers to refrain from this conduct that borders on criminality as there are real consequences for this behaviour,” Kieswetter said.

The revenue service encourages taxpayers to use its digital services.

“In line with SARS’ intent for taxpayers to use digital channels, SARS is happy to announce that the simulated WhatsApp calculator was used 51 547 times since the implementation of the process.

“The simulated calculator on the SARS website, which forms part of the SARS Online Query System, has been used 655 801 times. SARS has also received 53 519 queries through the voice channel, and 8 655 at branches.

“Taxpayers are encouraged to continue to use the digital channels, which are simple, easy and user-friendly. Using these channels means taxpayers do not have to leave their homes or places of employment to stand in queues,” concluded Edward Kieswetter, SARS Commissioner.

 

Done by: Mitchum George