Durban - A Durban pensioner has questioned the logic behind the SA Revenue Service’s (Sars) decision to impose a further tax on pensioners, and has described the latest move by the revenue service as cold and inhumane.
Dr Ben Singh was one of many former government employees who made their way to the Government Employees Pension Fund (GEPF) offices this week to question the massive cuts to their monthly stipends.
A civil servant for more than 40 years, Singh said he was shocked when he saw that more than a third of his pension income was gone last month.
“When I went to the GEPF offices, it became evident that I was not the only one having such a problem, and what was more frustrating was the casual manner of the officials when for many of us this was a crisis,” said Singh.
He added that he had not been satisfied with the answers that he received from the office, where it was indicated that the pensioners had been informed about the new tax regime applied to pensioners.
“What they did was provide me with a letter dated September 1 and it was printed out this week. My question was: if this policy was approved so early in the year, why was it not communicated to us? What we have here is the two organisations blaming each other but it is us pensioners who are suffering.”
Singh said it was grossly unfair to be taxed twice when he was earning a single income.
The massive cuts carried financial implications for him as he had regular bills to pay, including car and household insurance.
Singh also questioned the wisdom behind the taxing of retired individuals.
“When you are a pensioner, it means you are no longer working and that should mean that you get exempted from this,” he said.
Another Durban resident, who asked not to be named, said he had accompanied his mother to query the transaction when he realised that more people had a similar problem to deal with.
He added that his mother had been told that Sars had taken her money and she should raise her objections with them.
“She told me that Sars said they had not taken her money. So now who is telling the truth?”
In a statement this week, the GEPF said it had noted the concern raised by some pensioners with respect to a reduction to their pensions.
“As required by the Income Tax Act, the Government Pensions Administration Agency (GPAA) implemented a directive from the South African Revenue Service that provided for a revised rate of tax to be deducted from pensioners’ monthly pension payment.
“Prior to implementing the revised rate of tax, the GPAA wrote to all affected pensioners using the contact details that GPAA has, informing them of the choices they have.
“Some pensioners might have not received the correspondence or did not fully understand the choices/options they had.”
The fund said the impact on the tax paid by pensioners is as a result of changes to the revised tax rate (PAYE).
“It is important to note that this only applies to pensioners who receive more than one source of taxable income in addition to their GEPF pension, that is the income sources as reflected on the Sars tax system.”
It said pensioners had the option to opt out of the revised tax rate provided by Sars and revert to the normal PAYE rate applicable to their pension, but this may result in them having to settle a tax debt with Sars at the end of the tax year.
Questions sent to Sars spokesperson Siphithi Sibeko had not been responded to at the time of publication.