After our initial successes in securing the R1m tax exemption for South Africans working abroad, we have been informed that there is effectively no chance of a further change in policy to give South African Expatriates Abroad a more equitable outcome. This requires a revision of the strategy for the next 12 months as only by standing together as one will we have a chance to influence further positive change.

Mission Statement

Despite an unmentionable number of naysayers that we will not make it to Parliament and that we will not change the expatriate tax exemption repeal, we have delivered on exactly that. Now National Treasury is not responding to our submissions, confirming the policy to tax expatriate benefits and allowances which are only provided for us to enable a living abroad and referencing their political bosses as part of this decision making.

Expatriate Petition 2019

We will form a new expatriate petition to Parliament in 2019, asking them to accept our submissions and allowing Parliamentary debate. In our last appearance in Parliament in 2017, the Chairman of the Standing Committee on Finance, after hearing our pleas and arguments, directed National Treasury and SARS to work with us to come to a solution. Our cause is a good one and our arguments on why this expatriate tax is wrong for all South Africans, are irrefutable. Only by earning our position in Parliament can we have National Treasury and SARS again face-to-face and on equal footing, and we have seen the outcome of that.

Everyone Must Contribute

Our success will be determined by our ability to get everyone on board and including –

  • Current South African expatriates, including –
    • Rotational workers and other expatriates whose families are home in South Africa, making financial emigration and double tax treaty relief impossible;
    • Expatriates in non-Double Tax Treaty Countries, that remain particularly exposed; and
    • Expatriates who plan on claiming Double Tax Treaty relief, which is an every-year process that is time consuming and costly, and which does not provide a guaranteed outcome as you must still win the “tie-breaker” test against SARS.
  • Past South African expatriates, including –
    • Expatriates who have financially emigrated as they understand the trauma of leaving South Africa to make a living and the challenges of the expatriate lifestyle; and
    • Expatriates who have obtained another Nationality in solidarity with those who are less fortunate.
  • South Africans living in South Africa, including –
    • Anyone being allowed to make a living from funds generated by another South African abroad; and
    • South Africans who wish to one day also go work outside to gain international experience and exposure, or their parents wanting to create an environment where their children can work abroad and not permanently emigrate.

Three Big Wrongs

Expatriates Complain they are Forced to Work Outside South Africa

Our group is politically neutral, so whilst we acknowledge this is in many cases due to BEE, we must point out that our group has a significant component of South Africans from all backgrounds.

There is currently a critical skills list being finalized by the Department of Home Affairs, whereby they will allow foreigners to get special skill work permits to enter South Africa, due to alleged shortages of those skills in South Africa. We fully support foreign investment in South Africa and acknowledge the importance of foreign skills being introduced to South Africa, but nothing, especially not BEE, should stand in the way of South Africans having first choice at South African jobs –

  1. We will create our own database of expatriate qualifications and skills, comparing same to the Critical Skills List for submission to the Department of Home Affairs. There should be no special skills permit issued where a South African worker is willing and able to perform the same work.
  2. There must be a BEE exemption for these skills, otherwise South Africa’s emigration laws are self-defeating.

We must protect one another

SARS has made it clear that they are on an enforcement drive, so we will create a separate “SARS Litigation Fund” which will take on and defend any wrongful or questionable targeting by SARS of any South African Abroad.

Vigilance to Protect Everyone’s Interest

  1. The White Paper on Emigration refers to a compulsory registration of South Africans abroad, which raises the question whether this is part of a wider strategy to target South African passports. Taxing based on passport is not a foreign concept, as it is done by the United States and the R1m tax exemption is an uncanny resemblance to the United States’ foreign earnings exclusion rules.
  2. There has been media comment that Expropriation Without Compensation will not touch foreign landowners. We must ensure that expatriates who have properties in South Africa, albeit for families, parents, investment, holiday or retirement purposes; are not made soft targets as per the tax law change.

But What is the Plan?

  1. We need as many members as possible and we beg each expatriate to introduce more members to the Tax Petition Group, which is a voluntary association not for gain. It is critical that our reach is world-wide to all South Africans as well as back into South Africa, where we have much sympathy for our cause.
  2. Our members must become more active, so we can get a multiplying effect on membership, which will translate into petition signatories.
  3. The support of media is critical and our cause must feature in the media, including that we use our very limited funding towards getting membership, petition signatories and much more funding.
  4. With the mandate of our members we will petition Parliament and make formal representation for our cause.

Funding

We had a very small group of regular funders of small amounts, for which we are deeply grateful. The reality is that real funding now is more important than ever and what we need is (a) everyone contributing, (b) affordable or even small amounts, (c) on a regular basis. Where our causes are not won, the additional tax and costs of compliance will quickly outweigh the decision to leave the funding to others.

Conclusion

I am privileged to take-up this matter again, but we need a mandate with support and input from members. Being a South African myself forced to make a living somewhere else, I deeply understand the challenges and hardships, but this also makes me aware of the opportunities. Personally, my primary motivator is how I feel about our beautiful country and the potential it holds. But I also understand feelings of a harder relationship with South Africa and many have wounds.

We need everyone to contribute by being active with their time, promoting the group as much as possible, giving us the mandate and foundation for the collective’s interests.

Barry Pretorius

For more information and to support our cause please visit www.taxpetitiongroup.co.za

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