live

Gordhan sets record straight on retirement reforms

Cape Town - Finance Minister Pravin Gordhan is set to explain last-minute concessions in the tax law amendment, a week before his budget speech.

Do you have a question for Gordhan? Tell us now and we will ask him.

What we know so far:

1. The Zuma government has again been forced to backpedal on a tax law amendment compelling two-thirds of provident fund savings to be put in a retirement annuity. READ

2. When President Jacob Zuma signed the Taxation Laws Amendment Act late last year he was unaware of Cosatu’s objections to provident fund proposals, says Jeff Radebe. READ

3. Finance Minister Pravin Gordhan has conceded that the last-minute proposal to amend the tax changes will be very costly for businesses and will need to be finalised quickly. READ

4. The government has denied that the decision to table a legislative amendment to the Taxation Laws Amendment Act was a move to appease the ANC's alliance partner, Cosatu. READ

5. A tax industry player has likened government's backtracking on the Tax Laws Amendment Act to starting a rocket and then getting someone out just before the launch.  READ

6.  At a time when South Africa needs policy certainty, the ANC has put its interests ahead of the country by postponing the tax law changes, says the DA. READ

Last Updated
Live News Feed
Go to start

18 Feb 2016

The minister has concluded the briefing.

18 Feb 2016

Gordhan: We understand there are special things that need to be done and they can be done within the context of what we are trying to do here.

18 Feb 2016

Gordhan: We appeal to all parties to work together.

18 Feb 2016

Gordhan: The element postponed for two years is only the annuitisation aspect.

18 Feb 2016

Gordhan: In terms of provident funds there are benefits that will accrue to workers from March 1 2016.

18 Feb 2016

Gordhan: The act contains any number of tax provisions from the 2015 Budget.

18 Feb 2016

Gordhan: I hope this has helped to understand where we are going.

18 Feb 2016

Treasury: "Members of all pension funds, including public servants who are members of the Government Employees Pension Fund (GEPF), are not adversely affected by the new laws and should not risk their jobs by resigning. The hard-earned savings of all members of a retirement fund are perfectly safe, and accessible to them now and after 1 March 2016."

18 Feb 2016

Treasury: "There is broad consensus that the harmonisation and capping of tax deductions will make the tax system simpler, more equitable and progressive. It will limit the tax deduction to very high- income earners and allow lower- and middle-income earners a bigger tax deduction."

18 Feb 2016

The following amendments will continue as scheduled from 1 March 2016:

1. The tax deduction for contributions to all retirement funds (including provident funds) will increase to 27.5 per cent of the greater of taxable or remuneration, up to a cap of R350 000 per year, from 1 March 2016.

2. The minimum threshold required for annuitisation for pension and retirement annuity funds will still be increased from R75 000 to R247 500.

3. Aside from the issues covered in the urgent tax amendment bill, all other provisions legislated in the 2015 Tax Laws Amendment Act (and all other tax laws) will come into force on 1 March 2016.

18 Feb 2016

Gordhan: We are making an extra effort to inform the public.

18 Feb 2016

Gordhan: The problem is probably the complexity of what we are dealing with and the manner in which it is reported.

18 Feb 2016

Gordhan: There might be individuals gossiping behind the back, but I cannot say anything about that. On a formal level they are clear about what we want.

18 Feb 2016

Gordhan: We are in direct contact with leadership of Asisa. They understand the necessity of what we are doing.

18 Feb 2016

Gordhan: We are very aware that we need to keep businesses in the loop.

18 Feb 2016

Gordhan: Treasury - sometimes to my irritation - takes a long time to get industry comments and input. Something very few countries actually do.

18 Feb 2016

Gordhan: We have policy certainty in most of our retirement industry.

18 Feb 2016

Gordhan: We were assured that all the major players in the industry are happy with our move.

18 Feb 2016

Gordhan: We are simply saying, to clear up confusion, let's sit down again and discuss.

18 Feb 2016

Gordhan: Only issue here is whether during period of developing the process, we had enough input and we believe we did have enough consultation.

18 Feb 2016

Gordhan: This process started when I was minister of finance in 2013.

18 Feb 2016

Tax act delay will hit consumers long-term - expert

The problem with the latest delay in implementing the Tax Amendment Act is that it gives in to peoples' short-term use of provident fund savings to the detriment of long-term retirement needs, Ettiene Retief of the South African Institute of Professional Accountants (Saipa) cautioned on Thursday. 

FULL STORY

18 Feb 2016

Gordhan: If we scrap everything then we scrap annuitisation as well.

18 Feb 2016

Gordhan: We want to use the two-year period to clarify confusion and address concerns and try to come up with a better design on eg. annuitisation.

18 Feb 2016

Gordhan: In the longer term savings is a very important part of the sound financial future of families and of the country.

18 Feb 2016

Gordhan: We ask labour to work with us on the design.

18 Feb 2016

Gordhan: Why should we throw in the towel on something that could be beneficial to people in the long- term.

18 Feb 2016

Gordhan: We have given a commitment to trade unions that the social security paper will be released when ready - I have been busy with the budget in the mean time.

18 Feb 2016

Cosatu said on Thursday that they are not happy just with a mere postponement.

18 Feb 2016

Gordhan: Industry is not opposed to the move.

18 Feb 2016

Gordhan opens the floor for questions.

18 Feb 2016

Gordhan: Understand our intent and what the amendment bill actually addresses.

18 Feb 2016

Gordhan: The importance of this for reporting on the matter is that this is not changing one line that changes everything.

18 Feb 2016

Gordhan: The privilege of a tax deduction was now also extended to provident fund members and that kicks in on March 1 2016.

18 Feb 2016

Gordhan: Only the requirement of compulsory annuitisation after a certain amount has been accumulated will be postponed now.

18 Feb 2016

Treasury said the following changes will be introduced through an urgent tax amendment bill, to be tabled next week:  

1. The bill will propose to Parliament to postpone the annuitisation requirement for provident funds for two years, until 1 March 2018.

2. Provident fund members will not be required to annuitise contributions to their funds that were made before 1 March 2018.

3. To ensure the integrity of the retirement system, the ability to transfer tax-free from pension fund to provident fund will also be delayed until 1 March 2018. Clarity on possible misinterpretations will also be provided in the bill, to ensure that payroll administrators apply the law in line with original intentions.

18 Feb 2016

Gordhan: Remember this relates to new money accumulated in provident funds.

18 Feb 2016

Gordhan: This confusion and need for further clarity in the minds of people who will be affected, led us to believe it is good to postpone one element only of the framework proposed.

18 Feb 2016

Gordhan: This has nothing to do with pension funds or Government Employees Pension Fund.

18 Feb 2016

Gordhan: As a result of signing of the act and following debate there is a lot of confusion - to the point where in fact pension fund members are not impacted by any of this but the confusion has created impact in people's minds.

18 Feb 2016

Gordhan: Why are we undertaking this effort at this moment?

18 Feb 2016

Gordhan: When does the provision of annuitisation begin - it was at R75 000 - after presentations by unions it was increased.

18 Feb 2016

Gordhan: Tax Laws Amendment Acts have many proposals.

18 Feb 2016

Gordhan: So it is not correct to say tax laws are postponed.

18 Feb 2016

Gordhan: 2015 Tax Laws Amendment Act cover hedge funds, hybrid funds etc

18 Feb 2016

Minister of Finance Pravin Gordhan: This is an important matter.

18 Feb 2016

Gordhan has begun the media briefing, saying that media is not reporting on the matter correctly.

18 Feb 2016

Cabinet is to table an urgent legislative amendment to postpone the implementation date of the Taxation Laws Amendment Act, reports Government's SA Government News Agency:

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.

18 Feb 2016

This infographic explained how the retirement reforms would impact South Africans.
INFOGRAPHIC: 20 facts to de-mystify tax laws

18 Feb 2016

What we know so far:

1. The Zuma government has again been forced to backpedal on a tax law amendment compelling two-thirds of provident fund savings to be put in a retirement annuity. READ

2. When President Jacob Zuma signed the Taxation Laws Amendment Act late last year he was unaware of Cosatu’s objections to provident fund proposals, says Jeff Radebe. READ

3. Finance Minister Pravin Gordhan has conceded that the last-minute proposal to amend the tax changes will be very costly for businesses and will need to be finalised quickly. READ

4. The government has denied that the decision to table a legislative amendment to the Taxation Laws Amendment Act was a move to appease the ANC's alliance partner, Cosatu. READ

5. A tax industry player has likened government's backtracking on the Tax Laws Amendment Act to starting a rocket and then getting someone out just before the launch.  READ

6.  At a time when South Africa needs policy certainty, the ANC has put its interests ahead of the country by postponing the tax law changes, says the DA. READ

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For only R75 per month, you have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today.
Subscribe to News24
ZAR/USD
15.17
(-0.34)
ZAR/GBP
20.26
(-0.17)
ZAR/EUR
18.06
(-0.25)
ZAR/AUD
11.16
(-0.28)
ZAR/JPY
0.15
(-0.46)
Gold
1811.70
(+0.20)
Silver
23.35
(+0.07)
Platinum
960.00
(+0.09)
Brent Crude
48.73
(+1.57)
Palladium
2359.66
(+2.07)
All Share
57911.11
(+0.29)
Top 40
53092.13
(+0.29)
Financial 15
11579.50
(-0.53)
Industrial 25
80043.67
(+0.26)
Resource 10
52879.57
(+0.52)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
Yes, and I've gotten it.
22% - 339 votes
No, I did not.
51% - 799 votes
My landlord refused
28% - 434 votes
Vote