SARS Receives Over R4.1 Bln in Savings Withdrawal Applications Under New Two-Pot System

SARS has made the directive process highly efficient, with applications completed in under 24 hours without human intervention.

The South African Revenue Service (SARS) has processed a significant volume of tax directives related to savings withdrawals under the new two-pot system, receiving applications worth R4.1 billion. From 1 to 10 September 2024, SARS received a total of 161,607 tax directive applications, including cancelled submissions. Of these, 98.9%—or 159,853—were related to Savings Withdrawal Benefits, averaging nearly 18,000 applications per day.

SARS Commissioner Edward Kieswetter explained that while pension or retirement fund contributions are initially tax-exempt, taxes are applied when the individual retires or makes early withdrawals. Withdrawals are taxed at the individual's marginal tax rate.

“Applications for tax directives are submitted to SARS by the fund administrator via eFiling. The directive instructs the fund on how much tax to withhold before the payout is made,” Kieswetter said. He also noted that any outstanding tax debt would be added to the tax on withdrawals unless a payment arrangement is in place.

SARS has made the directive process highly efficient, with applications completed in under 24 hours without human intervention. Taxpayers can access more information and simulated tax calculations through the SARS Online Query System and the SARS WhatsApp channel (0800 11 7277).

The main reasons for withdrawal requests include transfers due to divorce, transfers to a retirement fund, and withdrawals by the taxpayer. SARS has committed to providing periodic updates as the situation evolves.