The retirement industry is on the verge of significant reform which will see a number of new regulations being introduced.
In a budget review document published by National Treasury (NT) earlier this year, it indicated that the tax deductibility of individuals' contributions to pension funds and retirement annuities "as well as contributions to provident funds and employer contributions that will constitute fringe benefits, will be increased to 27.5% of the greater of remuneration or taxable income (excluding retirement annuity or lump sum income)" capped at R350 000 per annum.
The new provisions, which could be introduced as early as 2015, is vastly different from the current provisions, where the maximum deduction for retirement annuity fund contributions in many instances amounts to 15% of taxable income other than from retirement funding employment.
The intention of the changes is said to be the promotion of savings. Many retirees find themselves unable to sustain their living standards in retirement or are unable to retire in the first place.
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.