Home South African Sars to provide retirement fund tax relief

Sars to provide retirement fund tax relief

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the changes will impact taxpayers who receive income from more than one source, and where one of the sources is income from a retirement fund.

Picture Jeffrey Abrahams

The changes will impact taxpayers who receive income from more than one source and where one of the sources is income from a retirement fund.

THE SA Revenue Service (Sars) says it will introduce changes to its systems from March 1, 2022, to prevent taxpayers in certain situations from ending up with a large tax debt payable after assessment of their income tax return.

It said the changes would impact taxpayers who receive income from more than one source and where one of the sources is income from a retirement fund.

“Sars will introduce changes to its system from March 1 2022, to prevent taxpayers who receive income from more than one source, and where one of the sources is income from a retirement fund, ending up with a large tax debt payable to Sars after assessment of their income tax return.

“Sars is aware that a significant tax debt can arise at year-end when all sources of income are combined in order to determine taxable income and the tax due.

“In response to this, recently introduced legislation makes provision for Sars to determine the effective rate of tax in respect of the combined employment and/or pension sources of income of a taxpayer.

“The effective rate of tax is based on the latest data available to Sars, and that rate will be provided to the retirement fund administrators for purposes of withholding PAYE based on that data.

“This rate is then made available via [email protected]™ to the employer and will only apply to taxpayers who have a form of retirement income.

“Sars PAYE system allows for a taxpayer to request to be taxed monthly at a higher rate so that any tax due at year-end is adequately covered. However, not many taxpayers who fall into the category are making use of this option.”

Cape Times

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