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Can I claim tax that was deducted from my provident fund?
Any VAT you paid will relate to fees charged by your service provider. As a private individual, you will not be able to claim this VAT back. You pay tax on a withdrawal benefit according to the withdrawal cash lump sum tax table. This tax is determined by SARS (by way of a tax directive) and is independent of any other income you did, or did not earn. In other words, you are liable for this tax even if you earned no other income that year.
If you suffered an involuntary retrenchment (rather than voluntary resignation or dismissal), and it is recognised as such by SARS, then you should be taxed according to the retirement cash lump sum tables. This provides for a higher tax-free portion (the first R315 000 are not taxed, rather than the first R22 500 as per the withdrawal cash lump sum table). Depending on you actual circumstances, and how you were taxed, you may then have grounds for an objection.
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