Establishment of a cooperative bank for women, youth, and persons with disabilities; Taxation of deceased’s estate/inheritance & financial impact on women/widows

Multi-Party Women’s Caucus

07 March 2024
Chairperson: Ms K Bilankulu (ANC)
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Meeting Summary


The Multiparty Women's Caucus met to hear a briefing from the Department of Women, Youth and Persons with Disabilities (DWYPD) about the progress made with establishing a cooperative bank for women, youth, and persons with disabilities. There was also a briefing from National Treasury on the current legal and regulatory framework governing the taxation of a deceased’s estate or inheritance and the financial impact on women/widows.

The Caucus raised its questions and concerns. They were concerned about the depth of information not being sufficient, especially the reach within the rural areas. They wanted to know of all the channels being utilised for communication and suggested using different mediums, including the radio, as this would benefit all. The Caucus also told the Department that it should also try to simplify the information as much as possible. Members asked when and how shareholders in the bank would be informed to pay their subscription, as many women were interested in being shareholders. Caucus Members also wanted to know if public servants were allowed to be shareholders at the bank, mainly, if Members of Parliament could form part of the bank.

On the presentation from National Treasury, the Caucus agreed that the presentation was a painful one as it dealt with a matter of distressed widows who were left destitute with large taxation debt upon the death of their spouses. Caucus Members wanted to know how to handle this and how the distressed widows could be alleviated from such pressure. Members suggested that they would engage with other committees on this, and they suggested having a contact person who would work directly with the surviving spouse.

Meeting report

Opening Comments

The Chairperson began by asking if quorum had been met and it was confirmed. She recalled one of the Members saying that the Caucus was too small, despite it being a combination of many Members of Parliament (MPs). Perhaps this would be changed in the incoming seventh Parliament, as there were too few members.

Proceeding with the meeting she requested that the meeting agenda be flighted so she could read through it. Thereafter, the meeting agenda was adopted.

She mentioned that it was a wonderful day and that all should rejoice in the day, because it was the day before International Women’s Day, where women would renew their collective commitment to achieving gender equality. In this year, the Caucus would surely invest in women and the collective would ask themselves if there were any lives they changed, particularly how many lives of women and children had they changed which would warrant a celebration. And how many of the lives had been destroyed in the process? The theme for the year is: Invest in women. The Chairperson said the Caucus would focus on economically empowering women and inspiring inclusivity. She regarded women as the hope for their families and for society. United as one, they could achieve anything including eliminating Gender Based Violence and Femicide (GBVF) and the abduction of children. Soon, there will be elections, and the women of the Caucus should all put effort into achieving an equal split of the Members of Parliament. She commended the President and the Minister of International Relations for leading the country from the front in supporting the Palestinians. As such, the Caucus is proud of the position taken by the government.

The Chairperson welcomed all entities present, turned her attention back to the agenda, and noted all the absentees with apology. She hoped that the six absentees would not negatively affect the meeting. The decisions the Caucus would take at the meeting would bind all of them. She handed over to the Department of Women, Youth and Persons with Disabilities (DWYPD) to give its presentation.

Ms Shoki Tshabalala, Deputy Director-General: Social Transformation, DWYPD, greeted everyone and apologised for her poor connection and went on to introduce the members of her team.

Ms Tshepiso Ngobeni, Chairperson: Cooperative Financial Institution (CFI), introduced herself and her colleagues and led the Caucus through the presentation from the Department.

Summary of presentation from the DWYPD on Cooperative Bank

  • The Department commissioned the Cooperative Banks Development Agency (CBDA) to develop a concept paper that would provide information on how to register a women-owned Cooperative Banking Institution (CBI).
  • To advance the financial inclusion of women, youth, and persons with disabilities in their businesses and cooperatives.
  • The coordination would contribute towards ensuring that women take control of their own financial destiny and free themselves from GBVF.
  • The Coordination and facilitation of the establishment of the Cooperative Banking Institute (CFI)
  • Crystallisation of the concept, meeting with Stakeholders – 18 April 2023
  • Submission of draft proposal by Cooperative Bank Development Agency (CBDA) to the Task Team – 21 April 2023
  • Submission to Minister for approval – 27 April 2023
  • Awareness Campaign held on 22 June 2023, consisting of public and private organisations targeting women, youth and persons with disabilities with close to 200 attendees on-line
  • Survey which would indicate participant’s interest in establishing the Cooperative Banking Institute= 82% Yes & 4% No.

See attached for full presentation

Ms M Hlengwa (IFP) greeted everyone present and asked a clarity-seeking question. She said that she was worried about the depth of information not being sufficient. Did this information reach the deep rural areas or those groups targeted by the departments? Because everyone should be included. She told the Department that she was worried about the reach not including those who qualify to be part of the groups but were not yet registered under such groups. How could such persons be assisted?

The Chairperson said that she hoped that the departments were making note of all the questions.

Ms M Matuba (ANC) greeted everyone and commented on the issue of information. She requested physical copies of the presentations so she could engage with them. She agreed with Ms Hlengwa and asked the DWYPD to engage more about publicising the cooperative which it was currently working on. This would be a useful tool for women all over the country. She did not think it was difficult for women living in rural areas to produce R500 to officially form part of the institution. Which channels were being utilised for communication?

Ms Matuba suggested that the department could use different mediums, including the radio, as this would benefit everyone. The Department should also try to simplify the information as much as possible. Language barrier remained a problem and the illiteracy statistics in the country revealed that the Department still had a lot to do. This bank should also empower women, youth and persons with disabilities through education, as this is lacking currently.

Could the Department fast-track this for those in public service so that no one was left behind? And it should clearly indicate its expectations and limitations. Ms Matuba said she was concerned that the Department may not reach its objective. She was aware that some members of the committee were being vetted. What was the length of finalising this process? She appreciated the report presented and the work being done, and was hopeful for the future of women.

Ms M Gomba (ANC) mentioned that this was not the first time the Caucus had received a presentation on the investment towards a women-led bank. She recalled a presentation given where the Department had said at the women-led bank, women would be shareholders and form part of a Board of Directors. However, in the current meeting, with the current presentation, the Department spoke of cooperative governance, which were two different legal structures. Was it the same organisation that presented at the previous instance about a women-led bank? She was confused about this.

The Chairperson recalled that they had asked the organisation to return with a presentation providing clarity, and this was being done. The organisation had been discouraged from calling it a bank and to rather call it a financial service cooperative.

Department Response

Ms Tshabalala responded that in the presentation, the Caucus was informed that the Department would work on its communication strategy which would include all media platforms, reach various associations and structures, and even reach women individually. As soon as it has received its license, the Department could embark on this journey, and would also reach rural communities. Women are not a homogenous group, so they would be targeted in their diversity. The communications strategy would explore looking at all platforms, and would make use of the radio and also reach out to the Kaizer Chiefs football club. The Department would also distribute pamphlets.

The Chairperson mentioned that the women would love the pamphlets.

Further discussion

Ms N Maseko-Jele (ANC) asked for a progress report to measure the success of achievements.

Dr S Thembekwayo (EFF) asked when and how shareholders would be informed to pay their subscription fee as a shareholder in the bank. She confirmed that many women were interested in being shareholders.

Ms Matuba asked about the vetting process - were public servants allowed to participate in the shareholding of the bank?

The Chairperson noted the two additional questions and then handed over to the Department for responses.

Ms Tshabalala mentioned that, as written in the slides, the DWYPD had written to the Department of Public Service and Administration (DPSA) about whether government officials could be members of this institution and the response was in the affirmative. The DPSA reflected on this again and subsequently made a submission to the Minister which was endorsed. She was happy to make a follow-up in this regard.

Ms Ngobeni responded by saying that the Department anticipated receiving feedback in April 2024 on the completion of its application. However, it was in constant communication with the DPSA. Members were welcome to buy shares within the bank at any time. She was aware that when members brought shares, it was through an association. The Department’s marketing team was working hard to distribute pamphlets to as many regions. Membership was available only through association.

Dr Thembekwayo had a follow-up question. Hearing that women could only be members through an association was distressing, as this would complicate matters. She asked for more clarity regarding the participation of Members of Parliament. Could they rather not form part of a different group?

Ms Matuba asked about the affiliations with associations and recalled slides saying that the potential shareholders were to pay a fee of R500. She asked for further elaboration on this.

The Chairperson said the issue of the presentation was already covered. If there was missing information, the Secretariat of the Caucus would follow up on Members’ behalf.

Ms Ngobeni clarified that there were three ways of registering a CFI, one of which was through a common bond. A common bond was associational meaning that the individuals could only join through associations. In the recruitment process, interested individuals were advised to join through the associations, and this was clearly stated in the application (for those who dealt with women, youth and persons with disabilities). The Department would then channel such individuals to their respective associations. Unfortunately, the Department was not able to stray from this rule of having a common bond. If one was part of an association, they were eligible, and those that were not were channelled to the respective associations. The Department tried to ensure that no one was left behind.

The Chairperson asked about the provincial statistics noting that certain provinces received very low numbers such as the Eastern Cape having 12 members, and the like. What was the challenge with provinces such as the Eastern Cape? Did they not want to form part of the CFI? Why was the number so low?

Ms Ngobeni responded that the low numbers and other statistics came directly from the associations listed in the report. These were from members who had agreed to form part of their cooperative. With associations; they themselves had to form part of the membership and prove that they worked with women, youth and persons with disabilities. The statistics were based on the provinces, so the low numbers resulted from not having many associations registered as members. She acknowledged the low numbers with the Eastern Cape and hoped to bring those numbers up in the future. The people were more important than the statistics. Having 439 persons would not account for the numbers they desired to include in their books (the shareholders). This was a low number indeed but the Department’s marketing team was very busy trying to increase the numbers. It had nine associations so far and some only had one member, but could get more. The recruitment drive would increase the numbers which reflected the associations. Ms Ngobeni assured the Caucus that the numbers would increase as soon as the license was issued.

Ms P Majodina (ANC) asked about the comment made that those who were not with associations could not form part of the bank noting that Members of Parliament were individuals. Could they not participate until they formed part of an association?

Ms Ngobeni replied that at this moment, the answer was no, and Members of Parliament could not join until they formed part of the associations. The Department could lose its license for not adhering to the rules.

The Chairperson recalled Ms Ngobeni saying that the Department had asked permission from the Minister to have public servants form part of the institution, which was granted. Was this the case?

Ms Ngobeni responded confirming that  this was the case and the Department would provide more insight on this. The terms and conditions of this still need to be clarified. However, she was able to confirm that permission had been granted.

The Chairperson asked Ms Tshabalala to ask the Minister whether it was permissible for Members of Parliament to form part of the CFI. It was not fair that public servants were granted permission but MPs were not, especially when they did not have job security in their posts. MPs were nearing the end of term and the Department should consider those who would not return to Parliament. Could this be cleared with the honourable Minister?

The DDG promised to facilitate a session with the honourable Minister and Ms Ngobeni said it was important to have clarity on this. She told the Caucus that the Department was being guided by the internal steering committee. She would heed the call and discuss this matter further.

Ms Ngobeni provided clarity on membership, saying that Members were welcome to contact the Secretariat about joining; they did not want to exclude anyone. MPs could affiliate with an association before officially joining.

The Chairperson asked for the Secretariat’s contact details to be circulated to the Caucus. She released the Department from the meeting with the hope that it would reach its targets. She handed over to National Treasury to give its presentation.

Summary of presentation from the National Treasury: Taxation of Surviving Spouses
Mr Nhlanhla Radebe, Director: Business Financial and International Tax, National Treasury, introduced members of his team and led the Caucus through the presentation.

• 2019: Budget Review contained proposal to alleviate the burden in cases where a surviving spouse receives more than one income
• An option considered at the time was that rebates are not taken into account for withholding of tax by retirement funds– so that big tax bills do not become due at the end of the year
• Stakeholders requested delayed implementation
• 2022: Amendment came into effect
• All income an individual receives is included in gross income, with specific exclusions or thresholds to arrive at taxable income – with higher incomes attracting higher rates
• The progressivity is supported by the age-related rebates that set tax thresholds, which is the main mechanism to alleviate tax for older taxpayers (age being the main criteria, not the specific source of the income)
• If all income is not included, it becomes easier to hide income
• Widows with survivor benefits are not the only taxpayers who have multiple sources of income. For example people with two jobs, people with more than one pension fund or people who are “semi-retired” (i.e. receive some remuneration and a pension)
• The PAYE system is meant to help people spread their tax payments across the year so that they do not have to pay everything in the end.
• If the pension fund is unaware that this is a second income, they will likely deduct too little tax for PAYE, so a big amount becomes due at the end.
• To give retirees a way to ensure that the correct amount is withheld from the pension payment right from the start. To do this, tax law changed so that the SA Revenue Service (SARS) can indicate the correct rate to the retirement fund. This spreads the payment over the year
• Taxpayers can “opt out” of using the more accurate tax rate provided by SARS, by asking their retirement fund to use standard tax table and rates – but with the risk of a big payment on assessment
• Taxpayers can also request retirement fund to withhold more tax during the year, to minimise impacts at the end of the year
• If large tax debts accrued in the past, best remedy is for taxpayer to approach SARS to find a solution to settle the debt

See attached for full presentation


Ms Majodina disagreed that the presentation was a straight forward one. She acknowledged that the taxation laws were very limiting, and this made it difficult to engage on the topic, especially with the strict laws. Those who earned more were taxed more. However, it was unfair for the widow or widower to be taxed more when they had to provide for their entire family, and to suffer the penalties of the deceased spouse. Women suffered the most in these situations and the presentation did not allow for engagement on which clauses could be amended. Perhaps, Treasury should engage on a different process, because the presentation echoed the current tax laws.

Ms N Abraham (ANC) welcomed the presentation. She felt she had to comment on this, especially concerning the individual spouses and their income. The spouses had common grievances, be it an ordinary civil servant or a Member of Parliament. Regarding the gross taxation of the spouse’s income, this reached the point of the spouse relinquishing their salary than to have the required resources at the time. This brought about complications regarding the resources that were not available for the spouses. The spouses were taxed even more which placed the widows in great distress. Was some relief granted to the widows, be it proportional or otherwise?

Ms M Ntuli (ANC) said she agreed with Ms Majodina. This was a painful presentation. Previously, she was the chairperson of the Women’s Caucus, where she worked with the distressed widows. She even invited the then Minister of Finance to address the distressed widows. To them, said Minister told them, “It’s the law, and I can’t bend the law”. Sometimes, the widow would receive their benefits in the year and SARS would tax them for that benefit two or three years later, at a time when they were about to be evicted from their home. She agreed with Ms Majodina, this was too troubling to deal with.

The Chairperson echoed what Ms Majodina said earlier and asked if there was a clause that allowed for relief from taxation for the surviving spouses whether it be now or in the future.

Ms W Newhoudt-Druchen (ANC) welcomed the presentation. Explaining that concerning the surviving spouse, there were two types. One type would be a spouse who was still working and earning an income, and the other type was a spouse who was a homemaker and not working. In the event of the death of a spouse, and their pension had already been taxed, was there a difference in the amount of tax deducted between the working spouse and the spouse who was a homemaker? She was worried because the surviving spouse was left with a large tax bill if the pension was not initially taxed. She hoped she was clear on this.

Mr Radebe responded that the Department had encouraged the widows in severe debt to approach SARS to try to reach a compromise. He acknowledged the suggestion to introduce a lump sum tax. He asked that the Caucus compile some recommendations and forward them to National Treasury.

Ms Marle van Niekerk, Director: Personal Tax, SARS, responded by saying losing a spouse was very painful, and also during this time, there were many decisions to be made and administration to be done. These decisions could be made without the knowledge of the surviving spouse. On the SARS website, there was information available on what happens in the event of the death of a spouse. This could be used as a source of information. The beneficiary did not have to receive the pension benefit immediately. They could choose to defer it. For instance, in the example of the spouse who was working versus the spouse who was not working; for the one who was not working they may choose to receive the pension benefit immediately. And in this case, they would be taxed as per the norm. For the surviving spouse who was still working, they may choose to claim this benefit much later on in their life.

Tax consequences were a result of many decisions taken together as a unit. In many cases, it may be better if the surviving spouse did not claim the pension benefit immediately. In cases of needing a lump sum, there was a component of having a flexible system for times of need, which could help with a lump sum rather than drawing on a pension benefit.

A SARS official responded, saying she sympathised with the issues that were raised and imagined that it was painful to lose a spouse and to have to deal with all the emotional issues. Most spouses did not understand tax laws and receiving a letter from SARS demanding large sums of money one did not have, was very stressful indeed. For the letters received about huge amounts of debt, one could approach SARS, inform them of their financial standing, and ask them for assistance. SARS would then assess their financial circumstances and make a decision thereof. This was a solution that was offered and made available throughout the country. Upfront taxation could also be resolved by engaging with SARS. Treasury wanted to amend the laws so that the pension fund could be taxed at the correct tax rate and not to have large amounts of debt.

Another SARS official responded that there was the ‘old debt’ many people struggled with and potential future debt. He urged that people please approach SARS immediately about this and not to leave it until late.

Ms Majodina suggested that the Caucus follow up on the implications for the affected widows. The Caucus could invite the Committees on Finance and Appropriation so that they may discuss this clause. Widows were not avoiding paying tax, and neither would the members encourage anyone to do so. But it was a concern for the surviving spouses who had debt circling. SARS is not user-friendly and is feared by all. SARS was intimidating with its endless letters and strict actions. SARS needs to escalate this matter of clauses to assist the widows.

The Chairperson agreed that SARS was indeed feared by all and suggested that this be included in the legacy report since the Caucus may not have time at this moment. She agreed that they meet with the aforementioned Caucus to find a way to relieve the widows of their distress.

Ms J Tshabalala (ANC) said what was lacking was the issue of an ombudsman for the widows with a lived experience. Many widows did not even follow up, which meant that information was lost to them. There should be dedicated people to resolve this matter, unlike at SARS, where there was no one to work with directly.

Ms Abraham sought clarity and asked if SARS could respond to the fact that taxation of the surviving spouse occurred only at the end of the financial year, rather than monthly. And if it was taxed monthly, the tax would work out more than the annual tax. She agreed that the legacy report needed to include this and it should be proposed that the Caucus meet with the widows first to gain a full understanding of their struggles, before engaging with other committees.

The Chairperson mentioned that this was a good idea.

A SARS official responded, saying SARS was indeed a scary place and she too experienced anxiety when receiving letters from SARS. It was looking at a system whereby there was a contact person assigned to the surviving spouses to assist with their needs. And this made them more sympathetic and sensitive towards the surviving spouse. SARS wishes to re-activate this and is looking into it.
SARS has amended its legislation to ensure that it directs pension funds and retirement funds to deduct tax at the correct amount to curb the large tax amount problem.

Ms Tshabalala interjected to say that she was in full support of the suggestion to have a contact person for the widows/surviving spouses so they have someone to speak with about their problems.

Closing Remarks

The Chairperson thanked National Treasury for its contribution and wished it well on its journey.

Recalling that all the items on the agenda had been completed, the Chairperson reminded everyone of an upcoming meeting to adopt the legacy report. Because it would be International Women’s Day the next day, the Chairperson said that the Caucus would prepare a statement, and said statement would be released in the evening.

She thanked all for their time and participation and hoped they would work to find solutions affecting women. She appreciated the turnout because there were many issues faced by women and children, and it was important for all to deliberate on this.

The meeting was adjourned.


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