Picture: Moneyweb
Sars has received 1.2 million applications for withdrawals under the two-pot retirement system since it was implemented on 1 September but declined more than 200 000 of them because some of the applicants lied about their taxable income.
A total gross lumpsum of R21.4 billion has been paid out to date, according to Sars, but it did not give information about how much of this was deducted for tax. Finance Minister Enoch Godongwana said in his February budget speech that he expects R5 billion in tax from the withdrawals under the two-pot retirement system.
He will probably give a figure in his Medium-Term Budget Policy Statement (MTBPS) on 30 October.
The South African Revenue Service (Sars) says in a statement issued late on Friday that it received 1 213 646 applications for tax directives for withdrawals from the savings withdrawal benefit of the two-pot retirement system but only approved 1 148 729 tax directives for funds to be released.
The remainder were declined for a variety of reasons, including incorrect identity numbers and incorrect tax numbers.
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Sars commissioner Edward Kieswetter says that Sars “is deeply concerned that it was found that 213 654 taxpayers declared incorrect taxable income with the view to have a more favourable tax rate.”
He warned that taxpayers who understate their income are intentionally involved in evading their tax obligation. “A penalty will be imposed on taxpayers who understate their income. I want to caution taxpayers to refrain from this conduct that borders on criminality, as there are real consequences for this behaviour.”
Sars also said it wants to remind taxpayers who want to apply for a withdrawal under the two-pot retirement system to make sure that they verify their tax numbers, supply the correct identity numbers, and that they do not have any outstanding debt with Sars.
After a registered taxpayer applies, a successful tax directive informs the fund management how much tax to deduct from a withdrawal. Sars accepts directive applications 24 hours per day and processes them within an hour 365 days a year between 8:00 and 19:00.
Sars says unless a directive application is submitted outside of these hours, the response if the taxpayer is compliant is sent to the fund within an hour.
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Before a final amount is paid to the applicant, Sars will inform the pension fund to also deduct any outstanding debt on behalf of Sars before any payout is made to the member. If you have 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. Many people already found that they had tax outstanding with Sars after they applied to withdraw from their savings pots, and some received no payouts because the whole amount was spent on repaying Sars.
Once an application is sent to Sars to request a tax directive, it cannot be withdrawn when the applicant finds that there is an amount owing to Sars.
Sars says taxpayers must remember that two-pot retirement system withdrawals are taxed at a marginal tax rate ranging between 18% and 45% depending on their tax scales. Despite this public information, there are taxpayers who are wilfully understating their incomes, Sars says.
ALSO READ: Two-pot retirement system: You must be registered for tax to withdraw – Sars
According to Sars, its simulated WhatsApp calculator was used 51 547 times since implementation, while the simulated calculator on the Sars website, which forms part of the Sars Online Query System, was used 655 801 times. Sars also received 53 519 queries through the voice channel and 8 655 at its branches.
Sars is encouraging taxpayers to continue using 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.
In addition, Sars thanks retirement fund management entities for their friendly and professional co-operation that allowed Sars to play its part effectively and efficiently by speedily issuing the volumes of tax directives needed to date.
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