Move to double-tax SA expats slammed as discriminatory
South Africa’s move to scrap the tax exemption for South Africans abroad has been slammed as totally unjust, and highly discriminatory, according to Nigel Green, founder and CEO of financial consultancy, deVere Group.
Green was speaking out on the recent plans put forward by the country’s Revenue Services (SARS) to domestically tax those who earn an income overseas – even though they would still be taxed on their income abroad too.
Presently, those working in another country for more than 183 days each year do not pay tax on income from abroad.
“The plans by SARS to drop this exemption is going to hit the many hundreds of thousands of South Africans who choose to live and work outside South Africa,” said Green.
“The move is totally unjust and breaks the cornerstone principal of taxation: that the taxpayer receives government services for their taxes, such as healthcare, education, roads and police services.”
“These plans are highly discriminatory. It is simply unfair to tax someone because of their citizenship. Indeed, residence and/or territoriality are the only criteria upon which a fair income tax system should be based.
“This draconian move to double tax South African expats effectively shackles them to South Africa and they would no longer enjoy the same freedoms as almost everyone else in the world,” he said.
Green noted that South Africans living abroad should be celebrated and championed as they acted as ambassadors for the country.
They also play a significant role in defining the international view of South Africa and its core values, he said.
Moving backwards
According to Green, there are currently only two other countries in the world that currently maintain this citizen-based taxation (CBT) regime – the US and Eritrea.
“There is a growing campaign for the US to change from this system to residence-based taxation enjoyed by the rest of the planet,” he said.
“It is achingly regressive for South Africa to be looking to adopt CBT and to do so would put the country on the wrong side of history.”
With public comment on the Draft Rates and Monetary Amounts and Amendment of Revenues Laws Bill, Green urged South Africans at home to voice their opinions.
“This move to scrap the tax exemption for South Africans who live and work overseas is not the way forward for a modern, democratic nation,” he said.
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