R21.4 Billion Paid To Taxpayers Under Two-Pot Retirement System: SARS

The South African Revenue Service (SARS) announced on Sunday that a total of about R21.4 billion has been paid to taxpayers who applied to use their Savings Withdrawals Benefit from the two-pot retirement system.

Over 1.2 million South Africans applied for this tax directive, and at least 1.14 million of those applications were approved. SARS noted that the remaining applications were declined for various reasons, such as incorrect identity numbers and tax numbers.

"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," the revenue service said, SA News reported.

It added, "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 8 am to 7 pm."

The revenue service noted that if a directive application is submitted during business hours and the taxpayer is compliant, a response will be sent to the fund within an hour. SARS explained that if a taxpayer owes money, it may be deducted if there isn't a payment agreement in place.

Before a final amount is paid to the applicant, the pension fund will be notified to deduct any outstanding debt on behalf of SARS before any payment is made. If a person has a debt arrangement with SARS, the withdrawal will not be affected.

If there is debt owed, it will be deducted according to that arrangement. Additionally, a tax is applied to the withdrawal, ranging from 18% to 45%, depending on the amount. The Commissioner warned that taxpayers who intentionally understate their income are trying to avoid their obligations to the Revenue Service.

SARS expressed concern that 213,654 taxpayers have been found to have reported incorrect taxable income to get a lower tax rate. The commissioner noted that if a taxpayer understates their income, they are intentionally trying to avoid their tax obligations.

Penalties will be imposed on those who underreport their income. He cautioned taxpayers to avoid this behavior, which can be considered criminal, as there are serious consequences for such actions. The revenue service encourages taxpayers to make use of its digital services.