Two-pot boost for the fiscus

R13BN REVENUE: TAX COLLECTED ON EARLY RETIREMENT WITHDRAWALS DOUBLED EXPECTATIONS

- Liesl Peyper

The two-pot retirement system has generated just under R13 billion in revenue for the South African government year to date – more than double the initial estimate of R5 billion, according to the preliminary revenue collection figures for the 2024-25 financial year.

Edward Kieswetter, commissioner of the South African Revenue Service (Sars), divulged the latest statistics at a media conference in Pretoria on Tuesday.

The tax directives for the withdrawals were valued at R12.9 billion for the period – R7.9 billion more than the projected R5 billion, Kieswetter noted.

According to Sars's figures, more than 2.5 million tax directives were finalised, resulting in a gross lump sum payout of R47.7 billion.

Sars previously cautioned claimants under the two-pot system that it would collect any outstanding monies owed to it, which could have an impact on the amount claimants receive as a payout.

According to Kieswetter, Sars managed to recover R820 million in outstanding debt from individual taxpayers.

Withdrawals from the two-pot system are taxed at retirement fund members' marginal tax rate, which is significantly higher than the tax rate applicable to early withdrawals of retirement funds under the previous regime.

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