The South African Revenue Service (Sars) has reported that it has received 2,664,279 applications for tax directives for withdrawals from the two-pot system's Savings Withdrawal Benefit.
From the total number of applications, 2,403,379 tax directives were authorised for funding release. A total gross lump sum of R 43.42 billion has been paid out to date.
The remaining applications were rejected for several reasons, including erroneous identity numbers and tax numbers, among others.
"Sars would like to thank retirement fund management entities for their friendly and professional co-operation that has allowed Sars to play its part effectively and efficiently by speedily issuing the volumes of tax directives needed to date.
"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," said tax collecting authority.
Taxpayers were warned that before a final sum is paid to the applicant, the pension fund will be advised to deduct any outstanding debt on behalf of Sars before making any distribution to the member.
They were also warned that a withdrawal will be taxed at a marginal rate ranging from 18% to 45%, depending on their scale. Despite this accessible information, some filers are knowingly understating their income.
Sars commissioner Edward Kieswetter said that Sars is gravely concerned that 213,654 people have been found who have filed erroneous taxable income in order to get a more advantageous tax rate.
"If a taxpayer understates their income, they are intentionally involved in evading their tax obligation. A penalty will be imposed on taxpayers who have understated income. I wish to caution taxpayers to refrain from this unbecoming conduct that borders on criminality. There are real consequences for this behaviour," said Kieswetter.
IOL