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Inge Lamprecht writes that provident fund members have best of both worlds – saving for retirement in a tax shelter then being able to take 100% of savings as a cash lump sum on retirement.
This anomaly arose by government postponing the annuitisation of provident fund benefits – that was to have been implemented on 1 March – by two more years to allow for further consultation. But, National Treasury says it continues to hold the view that taxpayers who receive an upfront deduction for contributions to provident funds should be required to annuitise two-thirds of the money at retirement. Addressing delegates at the 2016 Tax Indaba, National Treasury’s Chris Axelson indicated that the situation has to be sorted out in the next two years or alternatives have to be presented. “We are in a little bit of limbo at the moment, but it is very much on the top of our minds,” he stated.
- Read this report in full at The Citizen
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