More than 1.2 million people have applied to withdraw their pension benefits from the two-pot system. A total gross lumpsum of R21.4-billion has been paid out to date.
These were announced by the South African Revenue Service (Sars) on Friday evening.
“Sars wishes to announce that to date it has received 1,213,646 applications for tax directives for withdrawals from the Savings Withdrawal Benefit of the two-pot system,” said Sars in a media statement.
However, the taxman did not disclose the amount of tax generated from the withdrawals
1,148,729 tax directives were approved
“Of the total number of applications, 1,148,729 tax directives were approved for funds to be released. The remainder were declined for a variety of reasons. [Reasons] including incorrect identity numbers and incorrect tax numbers, amongst others.
“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 implementation of the process.
“The simulated calculator on the Sars website, part of the Sars Online Query System, has been used 655,801 times. Sars has also received 53,519 and queries through the voice channel, and 8,655 at branches.
Use of Sars’ digital channels
“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 undignified queues.
Sars said taxpayers who want to apply for a withdrawal should make sure that they verify their tax numbers. They must also supply the correct identity numbers, and should not have any outstanding debt with Sars.
“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 are processed within an hour, 365 days a year from 8am to 7pm. Unless a directive application is submitted outside of these hours, the response will be sent to the fund within an hour. [That is] if the taxpayer is compliant,” said Sars.
“The pension fund will be informed to also deduct any outstanding debt on behalf of Sars before any payout is made to the member. …This is before a final amount is paid to the applicant.
“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 an arrangement.”
Some taxpayers wilfully understating their incomes
Taxpayers are reminded that tax will be imposed on a withdrawal. This will be at a marginal tax rate ranging between 18%-45%, depending on their scales. Despite this public information, there are taxpayers who are wilfully understating their incomes.
Sars Commissioner Edward Kieswetter gave further details on this.
“Sars is deeply concerned that 213,654 taxpayers have been identified. … [They] have declared incorrect taxable income with the view to having 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,” he said.
