 Authored by: Jean du Toit, Head of Tax Technical at Tax Consulting SA
The new Draft Tax Administration Laws Amendment Bill (“TALAB”), released on 31 July 2020, proposes a law change that will effectively lower the threshold for SARS and the National Prosecuting Authority (NPA) to criminally prosecute taxpayers. The proposed amendment The proposed amendment is directed at paragraph 30 of the Fourth Schedule to the Income Tax Act, section 58 of the Value-Added Tax Act and section 234 of the Tax Administration Act. All of these provisions cater for offences committed by taxpayers. More importantly, all of them provide that a taxpayer will be guilty of a criminal offence if they “wilfully and without just cause” commit certain acts or fail to meet certain obligations. The rationale behind the proposal is that our law makes provision for two types of culpability i.e. intention and negligence. Reference to “wilful” acts means that negligent conduct, which is measured objectively against what a reasonable person would have done in the circumstances, is excluded from the ambit of the offences referred to in these sections. National Treasury and SARS appears to be fed-up with excuses and wants to remove the hurdle that they must prove that the taxpayer’s conduct was “wilful and without just cause”. National Treasury is on record that the NPA is of the view that this substantially undermines the ability of SARS to ensure compliance and hampers the NPA’s ability to prove the elements of the crime. For this reason, it is proposed to remove this common wording, so SARS and the NPA can measure taxpayers’ conduct against the standard of reasonableness and hold them criminally accountable if they fail to observe it. Controversial policy change? Make no mistake, this change signals a violent change in policy, which may stem from SARS’ much anticipated new hard-line stance on tax non-compliance, which includes calling out tax dodgers publicly. The proposed amendment has already invited some impassioned ranting and will no doubt be the subject of some heated debate in Parliament. But we do not expect National Treasury and SARS to accept any unjustified criticism. They have been called out to get tax criminals behind bars and this law amendment will give them the tools; perhaps an overstep, perhaps not. On these items we generally have found National Treasury and SARS to be well researched and they will presumably be ready with international examples of other tax jurisdictions where similar measures have been implemented successfully. Public comment on the new tax bills are due on 31 August 2020 and this amendment will probably invite the most comments from members of the public and industry stakeholders. Those who feel it is extremely unfair that being forgetful on your taxes can now make you subject to a 2-year prison sentence, to remedy your forgetfulness; can write to SARS at acollins@sars.gov.za or National Treasury at 2020AnnexCProp@treasury.gov.za. What does this mean for taxpayers? The legislative process must still take its course, but taxpayers should err on the side of the caution and proceed as if the change will become law eventually. This will mean that ignorance or neglecting one’s tax affairs may effectively result in criminal sanction. Critically, where you have a blemished compliance history, your transgressions may have more serious consequences if uncovered after the new law change. The only sure-fire way to avoid this is to disclose acts of non-compliance by filing an application under SARS’ Voluntary Disclosure Programme, which provides full amnesty from criminal prosecution. Either way, the law change may serve as a cue for taxpayers that taking ownership of their tax affairs now becomes even more important. While there have been many calls for getting tax criminals behind bars, many would argue this may be a step too far. Whether those who criticize the change will have the courage of conviction to take this to the Constitutional Court, remains to be seen. However, for the standard South African, the simple position of safety is to make sure your taxes are fully compliant and not to take risks. Where you are unsure, get a tax diagnostic done. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook: Tax Consulting South Africa
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 Authored by Jonty Leon, Legal Manager at Financial Emigration
Government Moving to Hold onto South African’s Retirement Funds On 31 July 2020, the Draft Tax Law Amendment Bill (“TLAB”) contained a hidden announcement, which may prove to be the final straw for many ex-South Africans who still have retirement investments left in South Africa. The TLAB seeks to legislate to prevent a South African who has exited South Africa’s tax base, to withdraw their retirement funds from South Africa, until an unbroken period of 3 years has passed where that person can prove non-tax residency. This new test has never been raised in any Budget Speech or policy document. Also, this is a far cry from the current legislation which allows South Africans who have financially emigrated, and specifically concluded the exchange control portion of financial emigration to remove their retirement funds from South Africa upon such emigration being recognized by the South African Reserve Bank. Simply put, you have 7 months to execute a well-planned withdrawal strategy or you will be legislatively prohibited from withdrawing your retirement for at least a very uncertain 3 years. The Change was Foreseen Over recent years, there has been a substantial increase of South Africans formalizing their status as “non-resident” from both a tax and exchange control perspective, by using the financial emigration process. With this, many had decided to withdraw their retirement funds from South Africa and invest in a more stable economy. One of the biggest reasons for the formalization of non-resident status with SARS and SARB was due to the punitive tax regime implemented by government on 1 March 2020, which reduced the foreign employment exemption to R1.25mil. South Africans have been flocking to cease tax residency, where they have met the very specific requirements to do so, to avoid this tax regime. The financial emigration process in its current form, done correctly, has been achieving this successfully. Unsurprisingly, with so many people having exited and continuing to exit the tax base, government took the decision to crush the outflow by proposing to change the way in which people exit, instead of dealing with the core issue – a punitive tax regime for South African tax residents abroad. This change was proposed in the February 2020 Budget Speech, where it was announced that the exchange control portion of financial emigration would be phased out by 1 March 2021 and replaced with a new system. A system which was set to be more complex, or at the very least more stringent taking into account the wording that was used in February 2020. We also know Government has been eyeing retirement funds, as there has been various indirect statements made to that effect. This proposed law change now seems to pull all these strings together. 28 Feb 2021 deadline, but the time to start is now The proposed changes will likely come into effect on 1 March 2021 according to the TLAB and will allow a person to withdraw their retirement funds from SA, “who is not a resident for an uninterrupted period of three years or longer”. The Explanatory Memorandum to the TLAB goes on to say that “a new test should be inserted which will make provision for payment of lump sum benefits when a member ceases to be a South African tax resident”. This is indicative that previously and currently one would be able to withdraw their retirement funding when ceasing tax residency, albeit also ceasing exchange control residency. Thus, financial emigration in its current form has been that mechanism to cease residency under both. It would seem that government is more interested in when a taxpayer ceases tax residency over exchange control residency – for obvious reasons. This gives people until 28 February 2021, a mere 7 months, to withdraw their retirement funds from South Africa before the new regime and new “test” are implemented. A word of caution is that the financial emigration process takes months; so ex-South Africans cannot wait until the last moment to start the process. 6 Important Planning Steps From a practical perspective, seeing the system operate on a daily basis, the following should be considered –
Slipping this surprise law change into the TLAB only confirms what many expatriates and ex-South Africans have been sensing. It may very well be the last straw as the safety of retirement funding has been one of the few positives which South Africa has offered. Whilst the TLAB process must still run its course, one must question the wisdom of an approach to “wait and see” whether this one will be legislated. If you are wrong, you may just jeopardize your future retirement. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  Authored by: Jean du Toit, Head of Tax Technical at Tax Consulting SA
It seems the SARS Commissioner had an epiphany – make an example of delinquent taxpayers so others will fall in line. Apparently, following SARS’ media briefing on 30 July 2020, this is a deterrence tactic SARS will use in the coming filing season. Why have SARS never done this before? Surely, this is not new wisdom; why have SARS never done this before? We have asked this question ourselves many times – with many reports of tax evasion in the media, including some high-profile unanswered cases emerging from the multitude of commissions of inquiry, why have we not seen anyone in handcuffs? The answer may be what many suspects, which is that SARS is sitting idle. Or, perhaps, SARS is in fact hard at work rounding up tax dodgers but there is no way of telling because of SARS’ devotion to the secrecy provisions in the Tax Administration Act. These provisions can be found in Chapter 6 of the Tax Administration Act and generally dictate that SARS must preserve the secrecy of taxpayer information. Lest we forget, with the current Commissioner at the helm, on the strength of these provisions, SARS staunchly refused to share the tax records of former president Jacob Zuma with the Public Protector. So, what has changed? Is SARS allowed to “name and shame”? There are very limited circumstances where taxpayer information may be disclosed, such as divulging the information in terms of a court order, if the taxpayer gives written consent or where a specific Act expressly overrides the secrecy provisions. Section 74, however, determines that the Commissioner may publish the name of a taxpayer where they are convicted of a tax offence. For those who believe a “tax offence” is something committed by complete delinquents, think again. Tax offences range from the failure to submit a return or simply failing to notify SARS of a change in your registered particulars, to more serious transgressions relating to tax evasion. When publishing the offender’s name, the Commissioner may also disclose the particulars of the offence and the fine or sentence imposed. In other words, unless any of the exceptions apply (which is unlikely), SARS may only name and shame you if you are convicted of a tax offence. All bluff and bluster? If the naming and shaming will simply involve publishing the names of taxpayers who failed to submit their returns, then this is not a novel idea. SARS did this in 2018 where it published several names of taxpayers, including some well-known public figures, most of whom had to pay relatively modest fines. This initiative seemingly had little effect. The problem is that unless there is a legislative amendment that would make the secrecy provisions less strict, SARS must first obtain a conviction before it can publish an offender’s name. For more serious tax offences in particular, this will take time. So, unless SARS recently secured a surge of convictions which are yet to be published, it is unlikely that the Commissioner’s briefing signals a watershed moment. Any initiative that would improve the tax system’s deterrence factor is a welcome development, but a handful of taxpayers who are given a slap on the wrist will not do the trick. If SARS wants to send a message that carries any weight, we need to see some tax dodgers in orange jumpsuits. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  “The recent announcements by the Department of Home Affairs are a welcome relief to the expat community and the international mobility industry,” says Moeketsi Seboko, Immigration Manager at Xpatweb.
Home Affairs Minister Mr Aaron Motsoaledi delivered the Department’s 2020/21 budget speech during a virtual debate before the Portfolio Committee on Home Affairs on 22 July 2020. His speech addressed the revision of the Electoral Act, the signing by President Ramaphosa of the Border Management Authority Act, the support for economic recovery, war on corruption, and extension of validity of visas. Border Management Authority Act President Ramaphosa signed the Border Management Authority Act into law on 21 July 2020, which took immediate effect. This act addresses the need for an integrated and well-coordinated border management service that ensures safe travel and promotes licit trade. The Act will see the various independent agencies currently managing SA’s borders falling under a single authority: the Border Management Authority. This means the country’s borders now have an overarching law that regulates how they are controlled and managed. The Minister said the Department will begin implementing the Border Management Authority Act requirements immediately. Expats May Travel Under Special Conditions The Minister also confirmed that the Department is currently processing visas under special lockdown regulations. This will allow highly skilled expats to enter the country and help with the rejuvenation of the economy. “We have seen some clients who are categorized as critically-skilled expats being authorised to enter the Republic and others being granted visas to travel to the country to take up essential work. All this taking place during the lockdown. So we are grateful to the Department for their efforts to keep the economy running,” says Seboko. Stamping Out Corruption The Minister said the Department is continuing to fight systemic and entrenched corruption by some officials that has historically plagued it. He called the three main culprits - bribery, fraud and corruption - “the terrible triplets”. He highlighted the recent discovery of a fraudulent visa scheme, perpetrated by Home Affairs’ first Secretary for Civics and Immigration Services at its Namibian mission. The official was found to be selling visas to non-qualifying people in Pakistan and Bangladesh, enabling them to gain access without even travelling to Namibia to obtain the documents. This was just the tip of the ice berg, he told the Portfolio Committee. The Minister also confirmed that the Department had revoked 100 visas obtained in this manner. In addition, there have been recent reports of officials being arrested from other offices of the Department for selling birth certificates, IDs, visas and other documents. “With more of these anti-corruption measures taking place, we hope to someday see a corruption-free Department of Home Affairs,” comments Seboko. Foreign nationals stranded in South Africa and unable to travel back to their home countries can breathe a sigh of relief. In his address, the Minister said that Home Affairs will extend all permits and visas that were due to expire in the COVID-19 lockdown from 31 July 2020 to 31 October 2020. He further reported that he will be signing a Government Gazette to amend the current regulations, definitely giving effect to this before 31 July 2020. “We are aware of the fears among those stranded in-country on the legality of their status after 31 July 2020. One thing is certain though - visas will be extended until 31 October 2020,” says Seboko. However, those affected will have to wait for the amended regulations to be Gazetted to know if submission of visas will be allowed for those working, studying or accompanying spouses in the Republic. Closing Remarks Seboko believes that the address by the Department was positive overall and welcomed its intent. “One can only hope that Home Affairs succeeds in overcoming challenges in its obligations to the citizens of this country and foreign nationals legally admitted in the Republic,” he concludes. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/ Authored by: Jean-Louis Nel, tax attorney at Tax Consulting SA
Earlier this month, the Pretoria High Court granted a small business owner an urgent basis for relief against the South African Revenue Service (SARS) who depleted his bank account without following due process. The court ordered SARS to set aside the third appointment of Absa who collected R1.3-million on behalf of SARS from the taxpayer’s bank account in terms of Section 179 of the Tax Administration Act (TAA). The Court further ordered SARS to repay the amount collected from the taxpayer’s bank account, together with the costs of the application on a punitive scale within three business days after granting the order. This occurred shortly after the SIP Project Managers vs SARS Commissioner case whereby the court ruled against SARS in respect of third-party appointments to collect outstanding tax debts. Case background In this case the taxpayer was left with a frozen and empty bank account without any prior notification from SARS. When he realised SARS had collected the full balance of his bank account, he immediately contacted his tax advisor to enquire about his tax compliance. The tax advisor engaged with SARS, advising them of the situation and what detrimental financial effect their conduct has had on the taxpayer where it was apparent that there was no tax debt. The taxpayer had already closed two of his three shops in Johannesburg due to the collection proceedings. SARS undertook to investigate the matter but there was no sign of a quick resolution to the issue. Due to the urgency of the matter the taxpayer instructed his attorneys to approach the Pretoria High Court on an urgent basis. At the time of urgent application and prior to the third-party appointment by SARS, the taxpayer’s affairs for both Income Tax and Value Added Tax (the only two taxes he was registered for) were fully compliant. In fact, it materialised that SARS owed the taxpayer a nominal amount. The correct process In these difficult fiscal times, SARS is expected to exercise its considerable power to collect the correct amount of taxes to the benefit of the fiscus. However, this does not mean that rogue officials can act outside the law and appoint banks as collection agents, as they see fit. There are clear rules that must be followed, and this is to the benefit of society, which requires efficient revenue collection, but not abuse of SARS power. In terms of the TAA, the taxpayer has to be notified of any outstanding debt and the subsequent appointment of a third party, such as his bank, to collect the tax if no action is taken by the taxpayer to regularise their tax affairs. If SARS does not properly issue the final letter of demand it is precluded from taking collection steps in the normal cause. It is a peremptory requirement in the TAA for SARS to issue a final letter of demand to the taxpayer, ten (10) business days before SARS can appoint a third party to collect outstanding debt and this was recently also confirmed in SIP Project Managers-judgment. It is imperative that a taxpayer ensure that their rights are protected, especially during the unprecedented times of COVID-19, where we have seen that SARS has adopted a firmer position in collecting outstanding debt. SARS oversight There remains an unbalanced position in our tax administration law, which does not allow SARS officials to be held accountable for their actions. The Tax Ombud’s powers are restricted, as can be seen from their latest report where SARS appears to have flat out refused the Ombud to interview the implicated SARS officials. It is also unclear whether the Commissioner is acting against his officials internally. For now, a taxpayer’s only remedy appears to approach the High Court for relief. The Pretoria High Court has in both matters before Acting Judges Lingenfelder and Avvakoumides, respectively protected taxpayer’s Constitutionally enshrined rights against SARS. Authored by: Jashwin Baijoo, Tax Attorney at Tax Consulting South Africa
Everybody knows SARS is under collection pressure and they have grown rather fond of appointing 3rd parties, such as banks, to recover outstanding tax debts directly, which leaves taxpayers stunned. This is a quick and effective debt recovery measure, but the question is what about the legality of such appointment? These appointments may result in taxpayers suffering severe financial hardship, but worse still, it appears taxpayers have very limited options to find redress where a SARS official reaches into their bank account by means of an unlawfully executed process. As an admitted attorney, a fair portion of my early career was spent in Debt Collection and Litigation, and you learn first-hand that unlawful appointments and acts with no integrity, which have far-reaching implications for the debtors, can only be dealt with in a decisive manner. But what should you concretely do when your bank balance has suddenly disappeared? You can try and resolve this by making contact with SARS’ Debt Department or airing your grievances to the contact centre, but you may find SARS is less effective in returning your money than the kind of effectiveness displayed in accessing your bank account. Harsh as it may be, where you urgently want the transaction reversed, your surest recourse is a High Court application. Case in point is the recent judgement of SIP Project Managers (Pty) Ltd v The Commissioner for the South African Revenue Service (Case Number 11521/2020) which has reaffirmed faith in the judicial system when it comes to debt collection rules, by showing no fear or favour in upholding taxpayers’ rights. The case concerned facts where SARS took R1 262 007.00 from the company’s bank account, without following due process. The High Court declared SARS’ 3rd party appointment of the bank null and void. It then proceeded to sanction the premature issuing of a Final Demand by SARS, declaring such issuing as unlawful and ordering SARS to repay the funds as were unlawfully obtained. This case again illustrates that you need to know your taxpayer rights as protected by the law. The law is there for a reason, and when it comes to debt litigation, the courts of South Africa act both swiftly and decisively to ensure the protection of taxpayers against the anarchy created by the unfettered abuse of power. For a SARS Letter of Final Demand to be valid, there must be delivery of the letter to the taxpayer. The letter must contain both the recovery steps which SARS is permitted to take, as well as the relief measures available to the taxpayer. Should any of these requirements be lacking, the Final Demand will be considered invalid. Any subsequent collection steps implemented by SARS, by virtue of non-compliance with the Final Demand requirements, may be deemed unlawful, including the taking of the taxpayer’s funds directly from the bank via a 3rd party appointment. We have seen a significant increase in SARS using banks to collect alleged tax debts. In order to protect yourself from SARS, it remains the best strategy that you always ensure compliance. Where you find yourself on the wrong side of SARS, there is a first mover advantage in requesting a suspension of payment, protecting your bank balance whilst the matter is resolved. However, where things do go wrong, SARS must be engaged legally, and we generally find them utmost agreeable where a correct tax strategy is followed. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa  The Mauritian government recently announced several incentives that make Mauritius an attractive option for foreigners to live, work and invest in.
Tarissa Wareley, an Immigration Specialist at Xpatweb, says that besides cutting the minimum investment needed for an occupation permit (OP) as INVESTOR, to half. The government also relaxed other entry requirements that make it easy for someone with a spouse and elderly parents to move to Mauritius. “Under the INVESTOR scheme granting an Occupation Permit (OP) - which lets you reside and open a business in Mauritius - has been halved from $100,000 (R1.7 million) to $50,000 (R870,000). This investment remains under your control, invested in your business, with only 500 USD (R8500) as the processing fees for the OP. If you have an OP, you can bring your parents and spouse into Mauritius as dependents without having to obtain work permits for them. The permits have also been extended from three to 10 years,” says Wareley. “Other OP options include schemes such as “professionals”, self-employed, and retirees, aimed as further easing of living and working on the rainbow island” she adds. Wareley believes her company has seen a rise in the number of enquiries from South Africans who are considering moving to Mauritius. “Those looking to move to Mauritius have been pleased to learn that the process has become more affordable, streamlined, and attractive to residents, entrepreneurs and business owners,” says Wareley. Favourable tax rates for residents of Mauritius Lead Tax Advisory of the corporate limb of Temple Group, Vandana Boolell, and Lead Corporate Advisory , Aditi Boolell, say that Mauritius’ tax system is one of the most efficient and linear, with a maximum tax rate of 15%, and with exempted income of up to USD$15 000 (R261 000) per annum. They confirmed that there are tax benefits for South Africans moving to Mauritius. “The effective tax rates for individuals are well below those applicable to South Africa and other countries. An important difference is that Mauritian residents are only taxed to the extent of the money that they bring into the country. Any global income that isn’t sent to Mauritius won’t be taxed by the Mauritius Revenue Authority,” says Vandana Boolell. Other key tax benefits include no withholding taxes; no capital gains taxes on property sales, sales of shares, or assets; no taxes on dividends or income; and all income being repatriable, with no caps on FOREX and with no limit on tenure. Attractive tax policies for entrepreneurs and businesses Vandana Boolell says that there are a variety of tax as well as customs and duty benefits for companies operating out of Mauritius, with corporate tax being capped at 15% and the effective tax rates for companies being well below 15%. “Freeport and export activity is capped at 3%, with export activity also being exempt from the country’s 15% VAT. Mauritius also benefits from the various Free Trade Agreements like COMESA, SADC and CECPA, among others. Other incentives include tax holidays of up to eight years for companies in certain sectors, as well as headquarters of companies - under certain conditions - that move to Mauritius. Favourable tax policies and the newly announced relaxed immigration requirements means that it now makes more financial sense for South African businesses to set up shop in Mauritius,” concludes Vandana Boolell. Xpatweb and Temple Group Mauritius are jointly hosting a FREE webinar to help South Africans further understand the changes that came to light during the recent Mauritius Budget Speech. The webinar takes place via Zoom on Thursday, 9 July 2020. Secure your place soonest by contacting Rebecca Minnie on event@taxconsulting.co.za. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 14 years and includes over 90 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/  Authored by: Jean du Toit, Admitted Attorney & Head of Tax Technical at Tax Consulting SA
The Minister of Finance delivered an Emergency Budget on 24 June 2020, which can be described in diplomatic terms as gloomy, and uneventful. Most notably, despite speculation by some to the contrary, the Minister did not impose any new taxes, which leaves SARS with no respite as it faces a mighty revenue shortfall of around R300bn. One may expect SARS to be bleak about this, but by not coming to SARS’ aid, the Minister has taken a massive weight off Commissioner Kieswetter’s shoulders. The Emergency Budget gives away the fact that there is perhaps no expectation that SARS will even come close to its collection targets. The Minister of Finance has indicated that the funds will be sourced by other means, seemingly letting SARS off the hook to a degree. In other words, it appears that life has handed SARS too many lemons to make lemonade, in these extraordinary times. From here onwards, one foresees SARS embarking on two possible paths in the coming fiscal year, or a hybrid of the two. The obvious, but difficult, answer to this equation is to try and stem the tide by prioritising collections– most taxpayers and their tax advisors appear to expect SARS to be extremely aggressive in its collection of taxes in the coming months, which would make sense given the government’s desperate need for more funds. But SARS may choose to take an alternative approach to the crisis. It may decide to take it on the chin and not participate in Covid-19, taking the fiscal year as a write off. Instead of deploying its resources to try and extract taxes from a limping tax base, it will perhaps use the year of famine as opportunity. The Commissioner himself has lamented the lack of capacity within SARS, thus this may be a rebuilding phase to lay a new solid foundation for the future. In line with SARS’ 2024 Vision, the Commissioner has made it very clear that he wants to reimagine SARS where its work will be informed by data-driven insights, self-learning computers, artificial intelligence and interconnectivity of people and devices. This might be the ideal opportunity to make this happen. But is this the route to take? Whilst the second option might be the wiser of the two, it is hard to see how a systems approach will ultimately be the only answer. For every piece of tax law, there exists optimisation strategies; similarly, for each system there will be those all too willing to find ways to find hacks thereto. The Commissioner should perhaps resist turning its employees into efficient system administrators; rather re-instil the proud SARS auditor skillsets, which some believe have departed from the revenue authority many years ago. There is nothing like a proper in-depth SARS audit, by a seasoned professional, to unnerve even the most compliant. Confidence in tax positions adopted, almost instantly turned into panic with a couple of carefully aimed SARS audit questions. Perhaps SARS will roll up their sleeves and get back to the brass tacks of auditing and outsmarting tax dodgers. If SARS uses this opportunity wisely, we may just see a more resilient and assertive revenue authority emerging from the debris of the pandemic. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Tax Consulting SA: Tax Consulting SA offers a streamlined service in the calculation and filing of individual income tax returns, provisional income tax returns or any other more complex individual tax relate matters. Our highly qualified team of Tax practitioners are registered with SARS under controlling body of the South African Institute of Tax Practitioners (SAIT). As tax specialists, we remove the burden from clients to keep their tax affairs in good order, achieving optimal tax savings while ensuring full compliance. For more information on Tax Consulting please visit: Website: http://www.taxconsulting.co.za/ LinkedIn: Tax Consulting South Africa Facebook:Tax Consulting South Africa Immigration and International Mobility firm, Xpatweb, recently launched a survey to measure the impact of Covid-19 on the immigration industry.
Tarissa Wareley, an Immigration Specialist at Xpatweb, says some of the issues the Africa Permit Impact Survey aims to measure how many people are grounded either in or outside an African country that they work in due to the pandemic, which market sectors have been impacted the most, and how the government immigration departments of various African countries are affected by increased or reduced VISA and work permit applications. “Many people have found themselves stuck either in an African country or outside the relevant African country they need to be in for work, either with or without current employment and with visas and passports that are about to expire. The most pressing need is to find out how many international workers are affected across Africa. The intention is to provide this information to the government so that they can prepare for a potential influx of applications once travel restrictions lift,” says Wareley. Preparing for a spike in work permit and visa applications The survey is being distributed to multi-national companies with operations in Africa who specifically employ overseas workers for both short and long term assignments. “Once the survey is complete, we could potentially show different countries’ immigration departments what type of spike in work permit and visa applications they can expect. Xpatweb hopes to help these departments find a way to streamline these applications and get people into the countries they need to be in for work as efficiently as possible,” says Wareley. Wareley says some African countries’ immigration services are still open, with many of them still processing work permits but not visas. The processing time of these applications remains very slow due to Covid 19. However, Wareley’s team anticipate receiving an outcome as soon as the Immigration Authorities resume their activities in full. “Many countries still offer limited immigration services. Work permits, which are needed before a visa application can be done, can be completed in most countries during the lockdown. With this first step complete, workers’ visa applications can be processed as soon as restrictions lift,” says Wareley. Companies urged to be proactive about employee worker and visa applications For many foreign workers, work permit and visa applications are often a rushed administrative task that happens at the last minute. Wareley says companies will have to be more proactive about applications to avoid bottlenecks that will likely exist at many immigration departments after lockdown. She also added that, she highly recommends for all the paperwork to be prepared whilst waiting for the travel restrictions to be lifted. This will allow us to be amongst the first applicants after lockdown. “Many African infrastructure projects, such as those in the oil and gas sector, for example, have been put on hold due to Covid-19. Making sure that companies have the right people to get projects back up and running as soon as possible is a top priority for both the public and private sectors. A proactive approach will ensure companies who employ internationally and their staff avoid waiting and headaches down the line. Apply for work permits and visas well in advance so that people are allowed to enter the country as quickly as possible,” concludes Wareley. ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za ABOUT Xpatweb: HOLISTIC EXPATRIATE SOLUTIONS The Xpatweb group has been in existence for over 15 years and includes over 100 professionals, including immigration specialists, mobility practitioners, tax practitioners, attorneys, and chartered accountants. They offer holistic, client-centric, and fully compliant expatriate and work visa solutions. Clients can expect an exceptional end-to-end service that starts with an initial technical meeting to discuss any past challenges, a recommended optimal solution, and the creation of a roadmap and protocol for service delivery. They also offer an on-premises immigration audit service to confirm expatriate employees hold legally obtained, valid visas, and that their duties align with their visa conditions. In addition, their unique online immigration tracking system helps you to easily manage and track expatriate assignees across the globe, is fully customisable and dashboard-driven, and provides a secure repository for storing assignees’ documents. For more information on Xpatweb please visit: Website: http://www.xpatweb.com/ LinkedIn: https://www.linkedin.com/company/work-permit-south-africa/ Facebook:https://www.facebook.com/xpatweb/  Starting a new job in an employee’s career is usually an exciting event with the additional prospect of increasing their earning potential in most cases. With the evolution of payroll systems over the years, it is natural to accept that there should not be any discrepancies between what an employee has been offered and what he receives when they obtain their first payslip. Differences in net take home pay Unfortunately, it is not that uncommon for new employees to be faced with a different salary package at the end of their first month than the one they were initially promised as part of the recruitment process. Tanya Tosen, Master Mobility, Tax and Remuneration Specialist at Remuneration Consultants (Tax Consulting SA), says the general practice during the recruitment process is to present the prospective employee with a “dummy payslip” as an indicator to what the employee can expect in their net take-home pay. Ultimately employees are mainly concerned about what will be deposited into their bank accounts after all their deductions which include statutory taxes have been made. It therefore can cause a major break in trust if what has been presented in the dummy pay-slip and the offer letter is not fully aligned in the employee’s first payslip they receive. In-House Package Structuring Tool not aligned Tosen says the discrepancies may be attributed to the use of an in-house package structuring tool that has not been configured properly, or the tax treatment of certain benefits which have been calculated incorrectly. This problem is further exacerbated in an environment where there are flexible benefits structured into the employee’s package whereby an employee wants to see what the impact is on his take-home pay if he selects different benefit options. “This in effect means that the payroll department will have to run multiple dummy pay-slips to show this impact to the employee’s net take-home pay based on the employee selections made. This can be time-consuming and an additional administrative burden on payroll department,” says Tosen. In addition, companies should ensure that the pay-slip design is simplistic and easy to understand. The payslip should tie back to the offer letter prospective employees receive to minimise additional queries and create further mistrust. Fixed Package Structure It is also important to note that employees who receive fixed packages i.e. – a fixed basic salary and benefits which remain constant throughout the tax year – should not be faced with fluctuating Pay-as-You-Earn amounts and a different net pay from one month to the next. It is only when the employees earn variable amounts in addition to their fixed packages should there be a fluctuation in net pay and PAYE. “If this is not the case, it will be necessary to do an analysis of the payroll to find the specific reasons for these discrepancies,” says Tosen. Bespoke Package Structuring Tool Remuneration Consultants has developed a bespoke Package Structuring Tool for companies as a solution to the above problems. The tool is customized to the company’s remuneration structure and is configured to mirror exactly what the payroll should reflect when a dummy payslip is issued. ”We update this customized tool for our clients in accordance with any legislative or regulatory changes annually. This tool also provides an additional layer of comfort in ensuring optimal compliance from a tax perspective is maintained.” The structuring tool also serves as a double check to the payroll system; it is able to provide a dummy payslip to new employees based on selection criteria available in the company’s remuneration structure and it will also reflect the net impact of increases or decreases to a salary package. “In addition, it really is an excellent way of alleviating any additional administrative pressures companies may be facing amidst many other concerns raised by the Covid-19 pandemic at the moment where many employees are faced with changes to their current package structure.” ENDS MEDIA CONTACT: Rosa-Mari Le Roux, 060 995 6277, rosa-mari@thatpoint.co.za, www.atthatpoint.co.za About Remuneration Consultants: Remuneration Consultants South Africa provides market leading remuneration and employee benefit consulting services.Our competitive advantage is adding a layer of tax optimization to the solutions we deliver. This enables us to optimally structure your Total Rewards System from the ground up to be fully compliant, where tax is planned proactively and not a mere afterthought. Our team consists of full-time tax attorneys, tax professionals, reward specialists, global remuneration professionals (GRP), chartered accountants, professional accountants and psychometrists. For more information on Remuneration Consultants please visit: Website: www.remunerationconsultants.co.za LinkedIn: Remuneration Consultants Facebook: Remuneration Consultants |
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