Head of the School of Applied Taxation at the SA Institute of Tax Professionals (SAIT), Piet Nel, says he fully agrees with the new law (2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act).
Nel says the new law will be very helpful to people who are not financially astute.
"What the government is doing does not only happen in South Africa, it is also happening in other countries," says Nel.
He has warned people not to panic as this law will only affect them when they retire.
On Wednesday, President Jacob Zuma signed two pieces of legislation into law.
The 2015 Tax Laws Amendment Act and the Tax Administration Laws Amendment Act are both coming into effect as of March 1, 2016.
These laws will consequently impact members' retirement and provident funds.
After its implementation, people who retire or leave their jobs will only be allowed to withdraw a third of their pension, as the rest must be invested in annuities.
The finance ministry cannot make decisions about workers' money without their permission
Meanwhile, the Congress of South African Trade Unions (Cosatu) has criticised the new tax laws.
Cosatu says the finance ministry cannot make decisions about workers' money without their permission.
The labour federation says workers need to understand changes in tax legislation and be given the chance to agree to them before government makes reforms that are enforceable by law.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.
MINIMUM REQUIREMENTS TO REGISTER
The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.