Treasury to soften expat tax legislation

Jerry Botha

The proposed repeal of the tax law exemption on foreign employment income for SA expatriates working abroad has caused tremendous stress among everyone affected.

However, National Treasury’s been actively engaging with taxpayers and appears to be seeking a well-measured middle ground.

Standing committee of finance chairperson Yunus Carrim asked on August 29 that Treasury consult with affected parties and revert to the committee with some sort of a “deal”.

Sessions held on the matter with Treasury on September 4 and 5 were very constructive. Ensure a progressive tax system

The approach of Treasury, under the guidance of Christopher Axelson, emphasised the imperative to protect the interests of SA and ensure a progressive tax system, aligned with international standards. South Africans who venture internationally must be encouraged to come back, as there are dire skills shortages in certain industries.

This view is strongly supported by the existing department of home affairs critical skills categories for work visa purposes. Expatriates who want to return home for retirement must also feel welcome.Treasury has studied concerns raised by expatriates and many points conceded as valid.

Treasury’s proposed various options to soften the legislation, which will go a far way in addressing the Expatriate Petition Group’s concerns.

These options include considering extending the current 183-and-60 days test to a longer period(s) to qualify for exemption and/or exempting earnings up to a certain amount.

Written submissions hereon have been invited and parliament feedback is scheduled for next week.

There will no doubt be some tax change announced in 2017 and it’ll probably be legislated late this year or early next year, effective March 1, 2019. The changes must not make SA expatriates uncompetitive versus their counterparts in other countries, and weaken SA’s position as the gateway to Africa. The good news

Treasury/Sars remain in the hands of a very competent technical team. The process to date shows genuine consultative outcomes are very possible in SA.

Nick Brummer is director at Investonline

Moneyweb

Despite regulatory pressure and growth in the passive market – albeit off a low base – there’s been no meaningful drop in fees in the collective investment space over the past six years.

Nedgroup Investments’ analysis of asset-weighted average total expenditure ratios suggests retail expenses were broadly unchanged. Head of core investments Jannie Leach says it’s partly because the passive market isn’t a significant portion of the overall market yet. “I suspect that