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The South African Revenue Service (SARS) has received a staggering R4.1 billion in two-pot pension withdrawal applications since the beginning of September, when the new system was introduced. The system allows South Africans to access a portion of their retirement savings before reaching retirement age.
SARS reported that it has processed 161,607 tax directives for these withdrawals, including some that were subsequently canceled. SARS Commissioner Edward Kieswetter noted that the average turnaround time for processing applications is under 24 hours.
Kieswetter also emphasized the tax implications for those with outstanding SARS debts. “Taxpayers who owe SARS must understand that their tax debt will be added to the tax on withdrawals from the savings benefit,” he said. However, he reassured taxpayers that if they have established payment arrangements with SARS, the debt will be settled according to the agreement. Deferred tax debts, Kieswetter added, will not be deducted from the withdrawal.
For more information on how the two-pot retirement system works, listeners are encouraged to tune into a podcast available on Algoa FM Breakfast.
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