The South African Revenue Service (SARS) has revealed a staggering rise in withdrawals from the Two-Pot retirement system, with the total value now exceeding R35 billion. More than 1.9 million successful applications have been processed since the system’s inception.
In its latest update, SARS reported that it had received 2,153,942 applications for withdrawals under the Savings Withdrawal Benefit of the Two-Pot system. Of these, 1,914,306 applications were approved, resulting in a gross cumulative payout of R35,052,572,876.62.
Despite the substantial payouts, the gap between applications received and those approved underscores systemic challenges. SARS noted that 169,509 applications were declined for various reasons, including errors such as incorrect identification or tax numbers and system issues on the part of fund management entities.
An additional 41,523 applications were rejected due to insufficient funds or invalid codes, while 28,525 directives were canceled by taxpayers who opted to rescind their applications.
SARS attributed its efficiency in handling the high volume of applications to strong cooperation with retirement fund management entities. In a statement, the tax authority expressed gratitude to these institutions for their professionalism, which has enabled SARS to fulfill its mandate of issuing tax directives swiftly and accurately.
“SARS wishes to thank these institutions who play a critical role in the tax ecosystem for their professionalism that has allowed SARS to play its part in efficiently and speedily issuing required tax directives,” the statement read.
SARS Commissioner Edward Kieswetter issued a caution to taxpayers, urging them to ensure the accuracy of their identity and tax numbers when applying for withdrawals. He also warned against any activities that could be deemed criminal, emphasizing the importance of voluntary compliance.
To assist taxpayers, SARS continues to offer a variety of communication and support options via its website.
The Two-Pot retirement system, which allows South Africans to access portions of their retirement savings under specific conditions, has seen significant uptake since its introduction. The latest figures highlight both the demand for such a system and the administrative hurdles in ensuring smooth execution.
While the system has provided financial relief for many, it also underscores the need for improved processes to reduce application errors and rejections. SARS remains committed to its strategic objectives of clarity, ease, and compliance, ensuring that taxpayers can navigate their obligations with minimal friction.
