The South African Revenue Service (Sars) has received a total of 161, 607 tax directives from persons looking to dip into their two-pot pension fund savings.
Sars explained in a media statement on Wednesday that this figure includes directives that have been cancelled.
Sars Commissioner Edward Kieswetter explained the matter.
“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 pay-out.
The gross lump sum amount of the applications received totals R4.1-billion.
98.9% of the total number of applications received
Kieswetter said 159, 853 of the directives relate to savings withdrawal benefits. This is 98.9% of the total number of applications received from Sunday September 1 to September 10. It means Sars received an average of 17,964 tax directive applications a day.
He said contributions made to a pension or retirement fund were not taxed at the time of payment to the fund. But they were 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.
“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 be not [be] deducted,” said Kieswetter.
Sars is meant to review the applications and issues a directive that provides a binding ruling on the matter. Thus helping the applicant understand their tax obligations and responsibilities.
Turn-around time for Sars to complete applications is 48 hours
He indicated that the turn-around time for Sars to complete directive applications is no more than 48 hours. This is without any human intervention.
There are channels used by taxpayers to get more information from Sars about the new system. These include the Sars Online Query System on the Sars website. And the Sars WhatsApp channel – 0800 11 7277. The latter is 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.
