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Pensioners express concern about high tax deduction

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Some former government employees who have received their pension funds have expressed concern about the large deductions made from their pension.

They claim that their income tax has increased dramatically since October of this year.
And this has a negative impact on them because the pension money is their only source of income.

The retired school principal, Malatswa Molepo worked for thirty years and the Government Employees Pension Fund has been saving for his retirement.

Like some of the GEPF recipients, Molepo was surprised when his monthly income from October this year went down by more than R7000.

He says he doesn’t understand why all of a sudden, the deductions went up – compared to previous months. He says this happened for two months already.

“I’ve been amazed this month when my monthly salary was cut. It was cut with about 7800, then I was so shocked and I went to GEPF, so again, in October, the money was also deducted again, and then my medical aid lapsed because I don’t have money to pay that. So I’m complaining, I don’t know what to do. I’ve got two children. My own child is at the college upgrading, the other one is an orphan, depending on me and I don’t have money to take them through.”

Another pension recipient, Madimetja Ledwaba says the deductions on their pensions have affected them negatively, as they don’t have extra income.

“The government should look at this tax thing. I’ve got some reasons why I say so. When I was working, I was taxed, when I went on pension I was taxed and now they continue to tax me.”

Meanwhile, the Limpopo GEPF assistant director, Faith Mankga says the new policy has been implemented, which affects some pension fund recipients.

“There’s a new law which was implemented by SARS. And the law came into operation on the first of March 2022 to say everyone who has an extra income, an extra source of income, we’ll have a choice between the pay and the fixed tax rate, whereby if you choose to opt, pay as you earn (PAYE). It means at the end of the year, you will always start and that will be you, and SARS. It will be between you and SARS. But if you opt for a fixed tax rate, then it’s when you are you avoid the debt at the end of the year at the end of the financial year when you submit to SARS.”

Mankga says the beneficiaries still have options regarding their tax deductions. “The members, the pensioners, the beneficiaries, have the right to opt. We have a choice as GEPF whereby they opt whether they continue as normal PAYE or they opt for tax fixed rate. That’s when members will opt and then we are going to deduct according to the option of the member.”

 

 

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