Moneyweb reports that more than 2.4 million South Africans have applied to withdraw money from their savings components under the ‘two-pot’ retirement system, with a staggering R43.4 billion paid out to date.

This was indicated by the SA Revenue Service (SARS) on Friday. SARS noted that it had so far received 2,664,279 applications for tax directives for withdrawals. Of the total number of applications, 2,403,379 tax directives were approved for funds to be released. The remainder were declined for a variety of reasons, including incorrect ID numbers and incorrect numbers. It was previously reported that many retirement fund members who opted to withdraw funds were disillusioned and unaware of the tax implications, notwithstanding extensive awareness campaigns. A number of claimants ended up with no payouts as a result of the higher tax rate combined with outstanding debt to the revenue service. Withdrawals from the savings pot are taxed at the marginal tax rate ranging between 18% and 45%, depending on taxpayers’ income scales. However, a substantial number of taxpayers “willfully understate their incomes” said SARS Commissioner Edward Kieswetter.

• Read the full original of the report in the above regard by Liesl Peyper at Moneyweb

Get other news reports at the SA Labour News home page