The South African Revenue Service said on Friday that 21.4 billion rand ($1.2 billion) had been paid in the six weeks since a reform allowing people to make tax payments came into force. partial withdrawals from their pension funds before retirement.
The two-pot pension policy reform aims to support long-term retirement savings while providing flexibility to help fund members in financial distress.
It is expected to boost domestic demand and economic growth in the final months of 2024.
On September 11, ten days after the reform, the South African Revenue Service (SARS) said people had applied to withdraw R4.1 billion from their pensions.
On Friday, SARS said it had received around 1.2 million savings withdrawal requests, compared to 160,000 withdrawal requests between September 1 and 10.
Since September 1, pension contributions have been divided into a savings component and a pension component. One third of total contributions is allocated to the savings component and two thirds to the retirement component.
The savings component can be accessed at any time, but withdrawals must be a minimum amount of R2,000 and only one withdrawal can be made in a tax year. The amounts withdrawn will be taxed at the individual’s marginal tax rate, which will help increase the state’s tax revenue.
The central bank estimates withdrawals could be between R40 billion and R100 billion in the fourth quarter.
(1 $ = 17,4060 rands)
