Leaving SA more costly than leaving earth

It cost South African tech entrepreneur Mark Shuttleworth more money to leave his home country than it did to leave earth, according to a report by Forbes.

When Shuttleworth took his maiden trip into space in 2001, he did so at a personal cost of $20 million – just under R205 million at today’s exchange rate.

However, when Shuttleworth decided to leave South Africa – taking his fortune with him – the SA government slapped the entrepreneur with a hefty R250 million bill in levies, worth $30 million at the time, according to Forbes.

In June 2013, Shuttleworth launched a failed bid against the South African Reserve Bank (SARB) to have the country’s exchange control system declared unconstitutional, overturning the levy of R250 million he had to pay to get his assets out of the country in 2009.

In July, the High Court in Pretoria dismissed Shuttleworth’s application.

At the time of his emigration, Shuttleworth had assets worth over R4.27 billion in South Africa, but transferred the assets out of the country in 2008 and 2009, each time paying a 10% levy.

Government abandoned the levy a year after Shuttleworth moved the remainder of his assets out of the country.

The irony of exchange controls

According to Forbes contributor, Richard Grant, the Shuttleworth case serves as a case in point of exchange control regulations encouraging people to expatriate their wealth rather than disincentivising it, as intended.

“The existence of exchange controls (in any country) is a special, and perhaps extreme, manifestation of a general failure to recognize that such regulations are more likely to aggravate, if not cause, the kinds of problems for which they are believed to be the cure,” Grant said.

While the exchange controls have been loosened considerably, Grant said, they are still in force, and place hurdles in front of businesses that deal with large sums of money.

“Perhaps the greatest irony of that case, Shuttleworth v South African Reserve Bank and Others, was that the laws relevant to the contest were themselves the cause of the very actions they were intended to prevent,” Grant said.

“In other words, had exchange controls not existed, Mark Shuttleworth might still be living in South Africa.”

Shuttleworth currently lives on the Isle of Man and holds dual South African and United Kingdom citizenship.

Source: Forbes

More on Mark Shuttleworth

Shuttleworth exchange control: a legal view

Mark Shuttleworth’s court case can devastate South Africa: SARB

Mark Shuttleworth takes SA government to court

Mark Shuttleworth punts Ubuntu Phone OS at CES 2013

Must Read

Partner Content

Show comments

Trending Now

Follow Us

Leaving SA more costly than leaving earth