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Despite the efforts of Jacob Zuma and his lickspittles, the SA Revenue Service (Sars) has generally been regarded as something of a shining light in terms of efficiency in government. My current issue with it is therefore disappointing.
I am retired, with three sources of income: a pension (about 65% of total), a small retirement annuity, or RA (about 15%), and SA bonds (about 20%). As the latter two are not taxed at source, the pension fund — on my instruction — has been deducting more than the statutory rate on my monthly pension. This has always been sufficient to fully cover my tax liabilities and, in fact, I have received a small refund in each of the past four years. My overall tax rate works out at about 8%.
Now, in terms of a new directive from Sars relating to pensioners with more than one source of income, both my pension fund and my RA have been instructed to tax those incomes at more than 18%. How on earth Sars arrived at that figure is beyond comprehension; it makes no sense to me or to the intermediary who handles my RA. (He tells me that other clients have raised the same complaint.)
I am appealing Sars’s ruling, but it is already too late for my March pension payment. Hopefully a reversal will be authorised in time for next month’s pension, but I won’t be holding my breath.
It would be interesting to know how Sars arrives at the amounts specified in its directives.
Clive Kihn Durbanville
The FM welcomes concise letters from readers. They can be sent tofmmail@fm.co.za
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
LETTER: What is going on at Sars?
Despite the efforts of Jacob Zuma and his lickspittles, the SA Revenue Service (Sars) has generally been regarded as something of a shining light in terms of efficiency in government. My current issue with it is therefore disappointing.
I am retired, with three sources of income: a pension (about 65% of total), a small retirement annuity, or RA (about 15%), and SA bonds (about 20%). As the latter two are not taxed at source, the pension fund — on my instruction — has been deducting more than the statutory rate on my monthly pension. This has always been sufficient to fully cover my tax liabilities and, in fact, I have received a small refund in each of the past four years. My overall tax rate works out at about 8%.
Now, in terms of a new directive from Sars relating to pensioners with more than one source of income, both my pension fund and my RA have been instructed to tax those incomes at more than 18%. How on earth Sars arrived at that figure is beyond comprehension; it makes no sense to me or to the intermediary who handles my RA. (He tells me that other clients have raised the same complaint.)
I am appealing Sars’s ruling, but it is already too late for my March pension payment. Hopefully a reversal will be authorised in time for next month’s pension, but I won’t be holding my breath.
It would be interesting to know how Sars arrives at the amounts specified in its directives.
Clive Kihn
Durbanville
The FM welcomes concise letters from readers. They can be sent to fmmail@fm.co.za
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