Cabinet is to table an urgent legislative amendment to postpone the implementation date of the Taxation Laws Amendment Act.
Briefing reporters on Thursday, following Cabinet's fortnightly meeting, Minister in the Presidency for Performance, Monitoring and Evaluation Jeff Radebe said the amended act was supposed to come into effect on 1 March 2016.
"Cabinet has decided to table a legislative amendment to the Taxation Laws Amendment Act as a matter of urgency to postpone the commencement date from 1 March 2016 to 1 March 2018 to allow for further consultations with all key stakeholders," said Minister Radebe.
These consultations, said the Minister, may result in further amendment to the act.
Minister Radebe said a number of organisations and individuals have expressed concern about the implementation of the amended act. They made representations to government.
"It is apparent that despite the extensive consultation processes, which were embarked upon before the law was passed, still exist. Those concerns have to be addressed urgently to ensure that when the law commences, the changes to the provident fund benefits will be implemented smoothly and efficiently.
"An Amendment Bill will be tabled in Parliament within the next few days," said the Minister.
Cabinet has debated and considered the full implications of the commencement of the act. In terms of the act, the annuitisation of provident fund benefits would have commenced on 1 March 2016.
"That means that from that date, provident fund benefits and pension fund benefits will be treated equally in that provident fund members will on retirement be permitted to take one third of their provident fund benefits in cash as a lump sum payment and the remaining two thirds of their benefits will have to be used by them to purchase annuities. The very same provision applies to members of pension funds currently," said Minister Radebe.
The changes in the legislation affect high end earners and all other persons who belong to provident funds. -
SOURCE: SOUTH AFRICAN GOVERNMENT NEWS AGENCY