New tax plans upset ex-pats
SOUTH African’s living abroad are fuming.
Many will now be forced to come home after Treasury announced a proposal to remove the foreign employment income tax exemption for South African expatriates.
This means that those who make money from overseas employment could now be taxed domestically on their earnings.
Magda Schoeman, who has lived in Dubai for the last few years, will have no choice but to come back to South Africa.
“There’s no way we would survive in Dubai if it happens. We have made plans to come home. Most South African’s here live on their credit cards, have loans to consolidate their debt in SA, and we all have families whom we support financially in South Africa,” she said.
Wesley Green, a doctor working in Ghana, said he too would have to return home should the legislation be passed.
“Here, everyone is taxed 25 percent across the board. Now SARS wants to come after the remaining 20 percent (as I now fit into the 45 percent tax bracket in rand terms). This changes everything. Our government is making it extremely difficult, as a qualified medical doctor, to find a job, whether at home or abroad.”
Amanda Greef, who is working as a teacher in South Korea, is completely against the proposal.
“It’s heartbreaking. I’m quite despondent . Our Government does not care for us, but I love my country. I’ve had to look at options like financial immigration. I don’t really want this because my family and friends live in South Africa. But the proposal, will push me to emigrate, just to make a living. I’m not getting any younger,” said Greef.
Barry Pretorius, who has lived abroad for 18 years, but is currently working in Abu Dhabi, recently started a petition against the change to tax laws relating to foreign employment and income earned.
The petition has already received support from more than 3 000 expatriates.
He said that while he didn’t mind paying tax, the SA government would have to be fair.
“It has to be doable. The proposed system isn’t. Because of the exchange rate, you are very quickly placed into a high tax bracket, and that would make it impossible to pay .
“If SA’s tax scales are applied unilaterally , we could not pay it. If I had to pay 20 to 40 percent tax ,I would default.”
“The majority of people in Middle East are in the same position. Our country will turn us into tax aliens and tax criminals.”
Meanwhile, global headhunting firm for Africa, Homecoming Revolution, said they weren’t too pleased with the proposal.
“It may make people return home because it is too costly to work abroad, but we want people returning for the right reasons – if they choose to, not because they are forced to,” said Angel Jones , the CEO of Homecoming Revolution
Jones said they had many concerns with the proposal.
“It will make working overseas less attractive. Even though we’re a firm that wants to bring people back, we do encourage people to get international experience.The second concern is that it may make South Africans abroad give up their dual nationality.”