Retirement Fund Recipients Will See Changes in How They Are Taxed From 2022, SARS Says

• The South African Revenue Services has announced that they will change how retirement fund recipients are taxed
• Taxpayers who have more than one source of income, including retirement funds, will no longer receive a large debt at the end of the year
• The revenue service has realised that many taxpayers who fall in this category do not make use of currently available facilities to alleviate their debt

JOHANNESBURG - The South African Revenue Service (SARS) has announced that from the beginning of the new financial year on 1 March 2022 it will adjust its taxes for people who receive an income from retirement funds in addition to other income sources so that such people do not incur multiple taxes.

Currently, SARS imposes large debts on people who have multiple income sources, where these sources include retirement funds. Legislation has recently been passed which makes it possible for SARS to calculate the tax for people who fall into this category on a case-by-case basis.

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According to BusinessTech, this amendment is only applicable to people who receive an income from a retirement fund and are taxpayers. Their employers will be notified by SARS as to how tax should be applied to them.

How the tax changes will work

Presently SARS allows for taxpayers to choose if they want to be taxed at a higher rate each month, thereby covering any tax that might be due at the end of the year. However, as News24 reports, many retirement fund recipients do not use this facility.

"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," the revenue service said in a statement.

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Edward Kieswetter, the commissioner of SARS said that the revenue service champions transparency and clarity in their communications to taxpayers.

South Africa reacts to tax changes

@Just1NinJa said:

"Watch how these leaches attacking now."

@theSkankhunt96 believes:

"Funny lower tax on all things is the only thing that could help that economy. Yet that would leave the supreme incompotent rulers with less money so that will never happen. Ironic."

@ThorburnShelton shared:

"We all know the anc government is corrupt. Corruption is a criminal offence. Therefore giving money to the government could be construed as supporting corrupt activities. As such we may be legally bound to NOT pay over our taxes."

@Merinda_E remarked:

"High time too."

SARS wants to tax cryptocurrencies

Previously Briefly News reported that the South African Revenue Services (SARS) has announced that it will like to institute regulations around cryptocurrencies such as Bitcoin. They have published a page called Crypto Assets & Tax online, which informs cryptocurrency owners on how they will be taxed.

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The reason behind SARS's move is that cryptocurrencies are decentralised and therefore unregulated in most countries as governments are not sure how they should be taxed.

The page states that profits which South Africans make from trading cryptocurrencies will be liable to taxation. The profits will be classed as either revenue or capital, depending on the specific case it applies to.

Source: Briefly News