South Africa’s taxpayers are leaving in droves, but should expect changes in 2022, says expert

2022-01-23 08:00:00 AM

South Africa’s taxpayers are leaving in droves, but should expect changes in 2022, says expert

Business, Technology

South Africa’s taxpayers are leaving in droves, but should expect changes in 2022, says expert

It is looking increasingly likely that government will consider new measures for South Africans leaving the tax net in 2022.

President Cyril Ramaphosa has assented to the Taxation Laws Amendment Act meaning the government’s promise to scrap the exit tax on retirement interests has been confirmed. However, it is looking increasingly likely that government will consider new measures for South Africans leaving the tax net in 2022, says Jean du Toit, head of tax technical at specialist advisory firm Tax Consulting SA.

The 2021 Draft Tax Bills were published in July last year, which tabled the proposal totax the retirement interests of South Africans ceasing tax residency.The reason for the proposed tax was that certain tax treaties restrict the South African Revenue Services’ (SARS) right to tax retirement interests of South Africans once they leave the country, said du Toit.

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Subscribe President Cyril Ramaphosa has assented to the Taxation Laws Amendment Act meaning the government’s promise to scrap the exit tax on retirement interests has been confirmed.Speaking at a media briefing on Thursday (20 January), Basic Education minister said Angie Motshekga said the GEC is seen as an ‘important and progressive qualification’ that will improve career pathing, employability and reduce dropout rates of South African students.A still from Blood Psalms.Violence, blackouts rising concerns in South Africa Political risks, violence and critical infrastructure blackouts are rising concerns for businesses in South Africa.

However, it is looking increasingly likely that government will consider new measures for South Africans leaving the tax net in 2022, says Jean du Toit, head of tax technical at specialist advisory firm Tax Consulting SA. The 2021 Draft Tax Bills were published in July last year, which tabled the proposal to tax the retirement interests of South Africans ceasing tax residency . “Information and scores from the 21st-century skills into School-Based Assessment (SBA); standardised curriculum tests and through an inclination (or talent) assessment, will be used to generate a report card, reflecting a holistic dashboard of learner’s skills and capabilities. The reason for the proposed tax was that certain tax treaties restrict the South African Revenue Services’ (SARS) right to tax retirement interests of South Africans once they leave the country, said du Toit. Disney+ From around June this year, The Walt Disney Company plans to launch its Disney+ video streaming service in South Africa, as the first country on the African continent to get access to this streamer that started in November 2019. “Government sought to impose an exit tax to counter the potential loss to the fiscus. “This year, about 300 schools will participate in the GEC pilot, with further up-scaling planned for 2023. But the proposal was met with fierce opposition from industry stakeholders and in particular the Expat Petition Group. Typically, these only focus on national catastrophes, but there is a need for BCP plans to address political disturbances and other types of business disruption like cyber.

The problem with the proposal was, among several others, that it would override South Africa’s international treaty obligations,” he said. The GEC is intended to formally recognise learners’ achievements at the end of the compulsory phase of schooling. You can cancel any time. “It was announced with Medium-Term Budget Policy Statement that the proposal will be withdrawn following the extensive public participatory deliberations with members of the public in parliament, where the problems with the proposal were ventilated. The promulgation of the TLAA simply confirms the decision to pull back. Under the current system, hundreds of students leave the school system each year without a qualification, hindering them from finding jobs.” Expect changes going forward Expatriates and those with plans to emigrate must be aware, however, that this may not be the end of the matter, said du Toit. “The fact that South Africans are leaving the tax net in droves is in itself a headache for National Treasury and SARS. Read:. Recent attacks have shown worrying trends such as ‘double extortion’ tactics combining the encryption of systems with data breaches; exploiting software vulnerabilities that potentially affect thousands of companies or targeting physical critical infrastructure.

The idea that many of these individuals take their retirement interests with them, without paying any tax, is a real bugbear for them. “National Treasury and SARS indicated in their response document that they will not let this go and further amendments will be considered in the 2022 legislative cycle. What these new proposals will involve is anyone’s guess, because this problem can only be overcome by renegotiating our existing treaties.” Du Toit said new changes are expected to be formally outlined in this year’s tax bills. “We will have to wait for the 2022 tax bills to see if expatriates have a new fight on their hands. In a year marked by widespread disruption, the extent of vulnerabilities in modern supply chains and production networks is more obvious than ever.

” Taxpayer shift Treasury data published in August shows that the Covid-19 crisis could prove to be a tipping point as more skilled people look to leave the country. For the first time since the current tax brackets were established six years ago, the country will see a drop in the number of top earners in the 2021 fiscal year, the data shows. Revenue from the three highest brackets will fall by 8%, or around R22.6 billion according to previously unreported treasury forecasts. The number of taxpayers earning R1. The majority of respondents (80%) think they are adequately or well-prepared for a future incident.

5 million or more will shrink 9.6% for the 2021-22 fiscal year. The R1 million to R1.5 million bracket is expected to contract 13%. The R750,000 to R1 million rand bracket is expected to contract 1. New entrant Shortage of skilled workforce (13%) is a new entry in the top 10 risks at number nine globally and eighth in South Africa.

1%. Personal income tax accounts for 38% of total tax revenue, far eclipsing corporate tax receipts, and those in the top three brackets represent a third of the total personal income tax base. Treasury said that it cannot attribute the drop directly to emigration as it does not track data on how many people have left the country. However, immigration consultants, real estate companies and bankers have said that they are seeing clear signs of wealthy people leaving. Read: . Fire and explosion (17%) is a perennial risk for companies, ranking seventh as in last year’s survey globally and coming in as a new entrant at number nine in South Africa.