The taxman was able to collect between R11 billion and R12 billion in taxes from the two-pot savings withdrawals system since it began in September 2024.
This admission was made by the SA Revenue Service (SARS) Commissioner, Edward Kieswetter, during an Allan Gray webinar.
The revenue service noted that more than 2 million South Africans had taken advantage of the system and had withdrawn around R43 billion collectively.
"The tax that we then withheld on that is just short of R11 billion," Kieswetter said during the webinar.
The Commissioner stated that SARS will prioritise retaining any outstanding taxes owed to the revenue service before releasing the funds.
“And we've issued directives for just short of a billion rand of debt to be collected. So overall, there is a higher than assumed contribution to the fiscus. We think probably about double what we thought,” he explained.
"We probably will end up (getting) closer to R11 billion or R12 billion to the fiscus," Kieswetter said.
“It’s R43 billion that (was added) to the current expenditure. If people were buying disposable goods, they were paying VAT, on that, or sin taxes. (However) it’s swings and roundabouts. It’s R43 billion that will no longer grow and add to the future of savings. It's short-term (and) it's not sustainable”.
SARS initially anticipated that two-pot withdrawals would contribute between R5 billion and R6 billion to the fiscus.
However, the actual tax take from these withdrawals has not only helped boost state coffers, but also injected much-needed spending into the economy.
On the flip side, Kieswetter warned that the significant R43 billion withdrawn from pension funds represents a substantial depletion of the country's savings pool.
More access
This week, the Congress of South African Trade Unions (Cosatu) said it was advocating for increased access to funds for workers under the system, saying the move will help them pay off their debts more effectively.
Withdrawals are permitted once per tax year and are taxable based on your marginal tax rate.
The union has submitted proposals to the government in which they request that workers should have greater access to their pension funds. Cosatu said it hoped that these proposals would be implemented later this year or next year.
The union said that the taxes charged as a result of a withdrawal were unexpectedly very high and called for changes to these tax requirements.
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