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On 1 November 2023, Minister of Finance Enoch Godongwana delivered the 2023 medium-term budget speech (MTBS). The Minister tabled the Revenue Laws Bill No 39 of 2023 (RLB) which introduced the new proposed implementation date of March 2025. The retirement fund industry welcomed the new proposed implementation date of 1 March 2025 and was comfortable that it would be ready to service the anticipated bulk savings withdrawal requests from retirement fund members.
On 21 November 2023, the draft RLB was tabled before Parliament's Standing Committee on Finance ('SCoF') for 'clause by clause' approval. The retirement fund industry was dealt a huge blow when SCoF rejected National Treasury's proposal to change the implementation date from 1 March 2024 to 1 March 2025. It was uniformly adopted at the SCoF hearing in Parliament that the implementation date for the two-pot retirement regime will be 1 March 2024. This means that 1 March 2024 has become the more likely proposed effective date. However, we still await the final parliamentary approval and final legislation which is expected before the end of 2023 or in January 2024.
Following the meeting of 21 November, SCoF will write to the Minister of Finance to say they want the implementation date to be 1 March 2024. The Minister of Finance has 14 days to respond. Once the Minister replies, the SCoF will make their final decision as to whether they think the implementation date should be 1 March 2024 or 1 March 2025. In early December, SCoF's report and the updated RLB will be tabled before the National Assembly for debate. A final decision on the implementation date is expected before Parliament rises for the year-end of 2023.
Retirement funds and their appointed administrators are working to ensure that they are ready for the implementation of the new two-pot regime if the new proposed date of 1 Mach 2024 is implemented. However, the success of readiness to pay saving withdrawal claims on the implementation date is dependent on the final legislation being promulgated as well as the FSCA's readiness to register and approve rule amendments relating to the two-pot regime. In addition to this, SARS still needs to find a solution for a seamless tax application process so that saving withdrawal claims are paid out quickly and efficiently.