This news aggregator site highlights South African labour news from a wide range of internet and print sources. Each posting has a synopsis of the source article, together with a link or reference to the original. Postings cover the range of labour related matters from industrial relations to generalist human resources.
BL Premium reports that National Treasury has defended the tax on withdrawals from the two pot system of retirement saying that it is progressive in that it benefits low income earners.
There has been much dissatisfaction, including by trade union federation Cosatu, over the fact that withdrawals will be added to taxable income and could thereby push taxpayers into a higher tax bracket. Members of parliament's standing committee on finance raised these objections with Treasury and SA Revenue Service (SARS) officials during a committee meeting on Tuesday on the 2024 draft tax bills. EFF MP Sinawo Thambo said the two pot system had become a “massive revenue collection” measure instead of being a progressive reform that was beneficial for workers. In his view, that there had not been sufficient education on the tax implications of the system. Treasury's acting head of tax and financial sector policy, Chris Axelson, pointed out that for those with very low or no income, there would be no tax on the withdrawal if the income and the withdrawal did not exceed a combined R95,750. He added: “The whole point of the system is to be progressive and to try to help those on lower incomes. If you have a lot of income you shouldn’t be withdrawing the money. It acts as a disincentive as well.” He emphasised that the two pot system was never envisaged as a revenue-raising policy and elaborated: “We couldn't have a system where people can withdraw money out of their funds and no tax was ever paid..”
- Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)
Get other news reports at the SA Labour News home page