Scrapping SA expats’ tax exemption is unjust, discriminatory and regressive

Nigel Green, founder and CEO of deVere Group.

South Africa’s move to scrap the tax exemption for South Africans abroad has been slammed as “totally unjust,” “highly discriminatory,” and “achingly regressive” by the boss of one of the world’s largest independent financial services organisations.

Nigel Green, founder and CEO of deVere Group, is speaking out as plans are put forward by the country’s Revenue Services (SARS) to domestically tax those who earn 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 overseas.

Mr Green comments: “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.

“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.”

He continues: “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.

“Under these proposals, they would be persecuted for living abroad.

“Yet South Africans living abroad should be celebrated and championed. They are among the most important ambassadors the country has globally. They play a significant role in defining the international view of South Africa and its core values.”

Mr Green goes on to say: “There are only two other countries in the world that maintain this outdated, misguided and wrong citizen-based taxation (CBT) regime: the U.S. and Eritrea.

“There is a growing campaign for the U.S. to change from this system to residence-based taxation enjoyed by the rest of the planet. 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.”

The deVere CEO concludes: “The Draft Rates and Monetary Amounts and Amendment of Revenues Laws Bill is open for public comment until 18 August. I would urge all South Africans at home and overseas who care about freedom and prosperity to make their opinions heard.

“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.”