 Authored by: Marisa Jacobs, Managing Director at Xpatweb.
There are many foreign national workers under lockdown in South Africa, which remains one of the least affected countries in the world in terms of Covid-19 cases. There is a common misconception amongst foreign nationals in South Africa, whereby they believe that nothing can be done to resolve their visa issues during lockdown. The negative consequence of this belief is that if one does nothing now, you will be faced with an immense backlog that the Department of Home Affairs (DHA) and the VFS is expected to deal with post-lockdown; and you do not want to be found on the wrong side of an expired work visa. Below a few key reasons to get started right away; 1. Be proactive - Get ahead of the queue! While applications cannot be filed during lockdown, expats and their employers must use this time to prepare these applications and book an appointment to ensure applications can be filed as soon as possible after lockdown has been lifted. Preliminary feedback from the latest Xpatweb 2020 Work Visa Risk Impact Survey shows that 70% of expatriate employers in SA have employees with visas that have already expired, or are due to expire soon, thus indicating there will be a flood of applications to Home Affairs post-lockdown. Some proactive planning will ensure you are ahead of the rush. 2. Upon Upliftment, you will again be forced to travel for renewals Certain classes of visa renewals, such as -
When travel restrictions are lifted, the special dispensation will cease, and expatriates will be forced to travel back for their visa renewal. Getting your extension in South Africa under the current special dispensation means a significant saving in cost and time, as well as not being forced to travel at an inconvenient time and removes the uncertainty that comes with visa renewals in certain foreign countries. 3.Uncertain future of work visas In these unprecedented times, many processes are fast changing. This causes uncertainty of what will be required going forward, including the possibility of needing health certificates and/or being forced to quarantine for an extended period of time. Until the special dispensations are revoked, you operate in a very clear cut and well administered system, provided you follow the rules and regulations. Additional considerations to take into account include; Review your current work visa category The main reason to change your work visa status is to fall into a better category. This generally refers to a category which allows longer or indefinite stay, or which grants you access to permanent residency or South African citizenship status. The current environment is ideal for a discussion on an immigration expert on the categories available and how to optimally plan your future. Avoid being a victim of Work Visa Malpractice There are many foreigners who have fallen foul of immigration malpractice by unscrupulous advisors, as the advisor is in a position of trust. One scheme is where a visa category is advised which is well known will cause considerable delays or will never be issued. Payment is charged upfront. Then additional payments are demanded or the ‘ball is kicked down the road’ when you enquire on your application status, with the Department of Home Affairs unfairly blamed. Often this comes with the promise of special contacts or forever a great excuse why there are no results. There are formal processes in place to determine your status and see whether what has been advised is the truth. Where you have a feeling something is not right, your instincts are normally correct. An approach of prudence and urgency is to be encouraged to avoid later disruptions. Closing remarks Now is the opportune time to start your visa renewal process. This prevents being caught in an expected rush later when restrictions are lifted, or processes adjusted to accommodate the different levels of restriction. A proactive approach will stand business in good stead to resume activities and focus on core business items rather than expatriate compliance 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/
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 Authored by: Janine O’Riley, Reward specialist at Remuneration Consultants & Tanya Tosen, Tax & Remuneration specialist at Tax Consulting SA
The COVID-19 outbreak has propelled countries around the world to implement strict measures to combat the virus. President Cyril Ramaphosa imposed minor restrictions on gatherings and alcohol sales as a start. These measures quickly escalated into a declaration of a national disaster to a complete lockdown period of 21 days with a further extension of 2 weeks. The economic impact of such drastic measures is proving to be a massive blow to the already struggling economy of South Africa. Employers are faced with a unique situation that require a sharp and tactful approach to balance the payment of employee salaries, looking after the individual employee needs and keeping the business afloat. Between a rock and a hard place While salary cuts and reduced working hours are realities many South Africans are facing currently, another mechanism employers can implement is to allow employees to identify what their suitable blend between cash and benefits are, based on their individual needs. This involves offering employees the opportunity to make certain changes regarding their benefits vs cash portion of their overall remuneration package. Employers need to be innovative to optimally utilise flexible benefits according to employees personal and financial requirements. How does this help your employees? It empowers them to exercise the choice on how to structure their package according to their personal and financial requirements. An easy way to understand this can be illustrated in the below two examples: Scenario 1 A family member currently on their medical aid might be sick and in the hospital so they would choose to keep their current medical aid choice as is, or if they might have an immune compromised member of the family on their medical aid – they would rather choose to move to a more comprehensive plan reducing their cash portion but providing peace of mind that should their loved one need medical care they would be sufficiently covered. Scenario 2 Similarly a employees’ spouse might have been affected by retrenchment and the family is in much need of more cash to cover day to day essentials – so they might opt to reduce their pension contributions for the time being in order to increase the cash portion of their package as this is what they need most in their situation. By providing employees with the above structuring options two things happen – {1} You empower your employees regarding their personal choices which makes sense to their individual needs in a time where so much power over your own decisions have been taken away – ultimately leaving them with a sense of security on various levels. {2} The employer will experience more focussed employees not being weighed down with the burden of how they will make ends meet, thereby enabling them to be more productive. What’s in it for the Employer? By implementing the above structure, the employer ensures that there are no extra costs in terms of their existing salary bill. This should also be an employer’s key focus now, where salary increases may become non-existent in 2020 and possibly thereafter. Providing employees with the flexible benefits option is a cost neutral exercise for the company where the employees package value is exactly the same before and after implementation. The only difference is that the benefit structuring within the same cost structure is just different. What if I don’t have a flexible benefit structure in place? Should this be the case it is a good time to implement firstly a Cost to Company salary structure, and then consider flexible benefits as an additional offering to compliment the structure. This is really where the value in a cost to company structure lies. The perfect accompanying tool for this implementation is a Package Structuring Tool (PST). This will enable each employee to make changes to their package as it suits their current circumstances and immediately see the effect of their choices on the tool. In doing so they are able to try different scenarios to see what changes would best suit their needs also illustrating the direct impact their selections will have on the net take home pay. They then sign off their final selections to be implemented on payroll. In a time where costs are being scrutinised as part of the company’s bottom line this is a win-win situation for both employers and employees alike. 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  Authored by: Lerato Mahupela, Immigration Specialist at Xpatweb
Worldwide travel restrictions are accompanied by various national strategies aimed at limiting the movement of people to prevent transmission of COVID-19. One of the global strategies has been to shutdown major port of entries, such as airports and border posts. This has left many travelling South Africans stranded in foreign countries and who are now unable to return home to their families. This is creating panic and uncertainty for travellers who cannot afford to book further accommodation or carry further living expenses in those countries. Following a Pretoria press briefing on 31 March 2020, the International Relations and Cooperation Minister Naledi Pandor said that the Department empathises with their plight and are doing whatever is within their means to assist them to be safe and to repatriate them back to South Africa. The Minister confirmed that, of the total 1 471 stranded citizens, 723 are students, 204 are workers, 224 are tourists and 320 have not disclosed their status. "I cannot say that these numbers are 100 percent accurate as it is based on people who have approached us for assistance through our missions and consular services. There may be more people in need of assistance that we do not know about yet," said Pandor. Government’s approach to assist those stranded abroad Many South Africans are experiencing difficulties in accessing documents and services in South Africa that enable them to extend their visa in the host country. This includes extension of travel insurance and other documents as may be required by the local authorities per the visa concessions made available during this lockdown period. Most South African missions have closed following the 21day lockdown announced by President Ramaphosa and officials have been working remotely to assist the repatriation process for stranded South Africans. The Minister has moved to assure family members of those stranded abroad by saying that "our missions, where possible, will continue to render consular services, including negotiating with the governments where there are lockdowns, in order to facilitate the movement of stranded South Africans." The Department will prioritise those who were most distressed – passengers stranded at airports, or running out of accommodation options, as well as the elderly and the sick. This include evacuation flights, possibly using South African Airways aircraft. For those who already purchased return air tickets to South Africa, Pandor said they should try to return back home at their own cost, by arranging with airlines they bought ticket from. She appealed to travel agents and airlines to accommodate and rebook these passengers on different dates as the airlines would now be allowed to fly to South Africa to bring back South Africans. For the rest of the South Africans who may not be stranded or distressed, they were advised to remain put to reduce movement until the end of the lockdown. Can foreign authorities abroad assist stranded South Africans? Our Missions were also tasked to also determine whether the authorities from host countries can offer any assistance to stranded South Africans due to the COVID-19 pandemic, for example by issuing extension of visas. President Ramaphosa has advised that he is working on the matter together with the Department of International Relations and Cooperation and various missions abroad. The Consular Services Unit at DIRCO Head Office is monitoring calls of stranded South Africans daily to ensure that they are informed all the time and will continue to be in touch with all South Africans until they are comfortably reunited with their families. To make it easier for people who are unable to make contact with the Missions abroad, the Department has established a 24-hour Command Centre. The Command Centre contact details are as follows; +27 12 351 1754; +27 12 351 1756, emails: Cicc1@dirco.gov.za and Cicc2@dirco.gov.za. All South Africans re-entering the country will be subject to screening and quarantining for a 14-day period. Xpatweb will continue following up on the above matters and advise as soon as we have further updates. 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, Tax Attorney at Tax Consulting SA
Following announcement of the actions taken by government to combat the COVID-19 crisis, many South Africans may be aware of the proposed tax measures that are effective from 1 April 2020. There is, however, an additional fiscal measure under the Value-Added Tax Act No. 89 of 1991 (“VAT Act”) that has been implemented that may have gone unnoticed. Our analysis on fiscal relief measures initially proposed, stressed the importance of bringing the VAT system into the equation, albeit in a different context. VAT relief When the Regulations under the Disaster Management Act No. 57 of 2002 were published on 25 March 2020, it effectively made provision for this exemption by providing for the definition of “essential goods”, which include: - Food - Any food product, including non -alcoholic beverages; animal food; and chemicals, packaging and ancillary products used in the production of any food product. - Cleaning and hygiene products - Toilet paper, sanitary pads, sanitary tampons, condoms; hand sanitiser, disinfectants, soap, alcohol for industrial use, household cleaning products, and personal protective equipment; and chemicals, packaging and ancillary products used in the production of these items. - Medical - Medical and hospital supplies, equipment and personal protective equipment; and chemicals, packaging and ancillary products used in the production of any of the above. - Fuel – including coal and gas. - Basic goods – including airtime and electricity. SARS announced on 27 March that items falling within this definition will fall under Item 412.11 of Schedule 1 to the VAT Act. Schedule 1 must be read with section 13(3) of the VAT Act, which provides for the exemption. There will also be a full rebate of customs duty in terms of item 412.11 of Schedule 4 of the Customs and Excise Act No. 94 of 1964. This initiative should stimulate the importation of essential goods, whilst providing much needed relief for vendors who would not be required to pay input VAT to SARS (see additional discussion on alternative VAT measures here). Word of caution With the increased demand for these goods, and with the VAT exemption on importation, business owners may be tempted to diversify their trade and capitalise. However, it is important to note that the importation of goods under this item in Schedule 1 is not unconditional. Businesses who wish to import these goods must obtain a certificate from the International Trade Administration Commission and may be subject to any further conditions agreed to by the Governments of the South Africa, Botswana, Lesotho and Swaziland. Naturally, relief measures must be implemented with haste, which means there may be some practical hurdles for taxpayers, especially in complying with any formalities. Whilst it is very difficult to avoid these issues, where there are hindrances in obtaining certificates for example, the impact of the relief is somewhat compromised. Work in progress Governments around the globe are traversing uncharted waters at a very high pace, which simply means that no one has the wisdom on the best way to survive the crisis from a fiscal perspective. The South African government appears to be paying attention when the private sector weighs in, which is an encouraging sign, as it continuously develops fiscal relief. For example, the relief package was expanded between the time the initial explanatory notes were published (29 March) to when National Treasury published the draft bills on 1 April. The Organisation for Economic Co-operation and Development (“OECD”) provides another perspective by compiling the various relief measures imposed by countries across the globe. The South African context is undoubtedly a unique one, but this is an invaluable contribution by the OECD that the government must utilise. Overall, government must be commended for the swift action it has taken in these times, even though we may encounter several kinks along the way. 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, Tax Attorney at Tax Consulting SA
Following President Cyril Ramaphosa’s announcement of fiscal relief for certain taxpayers, in light of other measures imposed to combat the COVID-19 crisis, National Treasury published explanatory notes on 29 March 2020, which outline exactly how the tax system will be used to ease financial distress during these times. The general intent with these measures, which will take effect on 1 April 2020, is to alleviate cash flow constraints and to prevent wide-scale shedding of jobs. The question is, are these measures well considered, or will they simply postpone the inevitable? The fiscal proposals can be summarised as follows: Expansion of Employment Tax Incentive (“ETI”) - The expansion will apply for four months from 1 April to 31 July 2020. - The maximum amount claimable will be increased from R1,000 to R1,500 if the employee is still in their first 12 months of employment and from R500 to R1,000 if in the second 12 months of employment. - Allowing a monthly ETI claim of R500 for employees who are –
Deferral of PAYE - It is proposed that the payment of 20% of PAYE liability be deferred for a period of 4 months without SARS imposing administrative penalties or interest. This only applies to businesses with an annual turnover of less than R50m. - Practically, the deferred PAYE liability must be paid to SARS in equal instalments over a six-month period, which commences on 1 August, meaning the first payment must be made on 7 September 2020. - The relief is not available to employers with outstanding returns or with an outstanding tax debt, unless very specific circumstances apply. Deferral of provisional corporate income tax (“CIT”) - Deferral of a portion of the payment of the first and second provisional tax liability to SARS, without imposition of penalties and interest. - The first provisional tax payment due from 1 April 2020 to 30 September 2020 will be based on 15% of the estimated total tax liability, whereas the second provisional tax payment from 1 April 2020 to 31 March 2021 will be based on 65% of the estimated total tax liability. - The deferred payments (the balance of 35%) must be paid when making the third provisional tax payment. - The same qualifying criteria that apply to PAYE find application here. Will good intentions translate to good results? One may ask if it would be wise for an employer to create a future PAYE obligation in respect of an employee who may no longer be employed when the payment is due. Downscaling in these times is unavoidable for many employers and their tribulations may compound if they have to start making payment of deferred PAYE in September if a segment of their staff contingent is no longer with the company. Moreover, when September comes along their PAYE liability will now be even higher than it was before the measures were put in place. For some businesses, 4 months may be sufficient to recover from the crisis, but for many the effects will prevail for much longer. The additional PAYE liability from September onwards may just be the straw that breaks the business. In terms of provisional CIT payments, the fiscal relief extends over a longer period, but again in the bigger scheme, the deadline for final provisional tax payments may nonetheless come too soon to truly see certain businesses through. It is also important to note that provisional tax payments are based on estimates of taxable income. Patently, with the anticipated slow-down and the concomitant reduction in revenue, estimated taxable income in the short term will be reduced considerably, which may yield marginal results from a relief perspective. Potential alternatives Perhaps, government should have taken a leaf from the tax measures imposed by the UK, where the VAT system was brought into the equation. Many small business owners will attest to the fact that their companies went under because of the way our VAT system operates. In most cases, VAT vendors have to account for supplies upon issuance of an invoice, as opposed to the date of receipt of payment. This simply means they have to keep paying VAT over to SARS, even if their invoices have not been paid. The suffocating effect of this phenomenon will be more acute in the coming months and a less distortive intervention would perhaps be to allow small business owners to operate on payment basis until we see things change. A further measure that could be implemented is to permit deductions in respect of contributions made to the Solidarity Fund, which was established specifically to help combat the virus and the effects thereof. Such an initiative would benefit the taxpayer and the country as a whole. Final remarks Given the short amount of time government has to implement fiscal relief and with prevailing budget constraints, this must have been a very difficult task. But it is short sighted to think that small businesses simply need 4 months of relief to ride out the storm. The current fiscal proposals may be sufficient for some businesses, but it may simply delay the inevitable for many others. 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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