The issue of pension is what most people do not take for granted at all. For such people it is a means of survival after their active years are gone. There are grievous implications of issues that have to do with pensions. Some people consider their pension as their life savings and the main stay of their livelihood when they will no longer be able to work. In this kind of situation applying pension tax to such retirement savings can be considered as a serious offence to such people. Also, most of them feel it is the responsibility of the government to cater for them in retirement; hence there should not be any need for their meagre savings to be taxed again. Most people who are already in retirement often think or have this opinion that tax should only be paid by people who are still living active and energetic lives.

It has often been said that large numbers of people do not have any form of retirement savings or pension fund. This is particularly true about people who do not have a regular source of income. They are usually striving to live ‘from hand to mouth’. For this category of people, a retirement saving account or pension contribution account may appear to be a luxury rather than a necessity. Their priority most times is not the future, but what they can do to get a livelihood per time. When such people are considered critically, the issue of pension tax does not even arise because there is actually little or no income to be taxed in the first place. And it is a common thing for this category of people to find subtle ways of evading tax on the little incomes they earn. In as much as it is against the law, some people have justified such actions that these people should be given a safety net and exempted from taxes until their conditions are improved.

There are several reasons that can be attributed to the way and manner which people dislike pension tax. One of such reasons is the way the pension is administered. A lot of people who make contributory savings to their pension or retirement savings account always have some confidence that at the end of their active life they will have something tangible to fall back on. But most times the principal beneficiaries of this plans die before their retirement. Besides payment of pension tax, the mere reason that the principal beneficiary’s next of kin will have to go through a gruelling process of identification and confirmation before such monies can be released to them has discouraged so many people from having such retirement instrument.

Pension for other people is an awesome idea, irrespective of whether pension tax is taken or not. For this type of people, the fact that at the end of the month a pay cheque comes in for them without having to do anything is really splendid. The money they had laboured and saved over years seems to be as if they are being given or paid free of charge.