Two-Pot system | SARS payout hits over R49 billion

JOHANNESBURG – The two-pot retirement frenzy continues with taxpayers withdrawing from their retirement savings.
As of 18 November, over R49.5 billion has been paid out to taxpayers. 
This is an increase of just over R28 billion compared to the R21.4 billion paid out in October. 
“Since the inception of the two-pot system, SARS has observed an unprecedented increase in tax directive applications likely reflecting the economic challenges faced by households,” said SARS in a statement.
According to SARS, 169,509 applications were declined for myriad reasons ranging from fund management entity system failures to wrong identification numbers or tax numbers.
While 41,523 directives were declined because of insufficient funds or wrong codes, taxpayers cancelled 28,525 directives after changing their minds.
Speaking to eNCA about the financial crisis affecting households, economist Elize Kruger said this is a reflection of the pain that many have had to endure over the past couple of years.
“We look at Covid-19 where salaries were not keeping up with inflation simultaneously with the high inflation rate which resulted in households bearing a lot of pain,” she said 
Kruger warns that households must be cautious when withdrawing their funds.
“Everyone should be careful about looking into the future because if you withdraw from your savings pot you are borrowing from your future self and will have less money to retire.
“It will be better for you not to touch your savings because that will result in a better retirement for you in the future,” she said.
By Zandile Khumalo.