Authored by: Marisa Jacobs, Director at Xpatweb

The 2019/20 Critical Skills Survey specifically tracked the impact of immigration across various sectors within South Africa’s economy.

The purpose was to highlight which skills employers find most difficult to recruit locally and as such provide input to the much-anticipated new draft critical skills list from the Department of Home Affairs which will specify which occupations will qualify for a work visa in the Critical Skills Visa category and as such directly impacting employers.

When unpacking the results, we found that 89% of participants stated that their organisation struggles to recruit critically skilled individuals.

Furthermore, 76% of participants indicated the need to search internationally for these skills which will assist the organisation to meet critical business objectives.

When asked about the visa application process, 79% of participants indicated that the process remains a prohibitor and with only a limited number of companies managing to avoid the negative impact that the visa application system might have on their business.

ICT Specialists and Engineers Remain in High Demand
The results further show that ICT Specialists and Engineers continue to be one of the most sought-after skills with 19% and 21% of participants respectively indicating same.

This is supported by the South African Institution of Civil Engineering (SAICE), who stated in 2019 that South Africa continues to lose hundreds of engineers year on year who emigrate with their families. This “brain drain” has created a massive skills shortage in the Engineering sector.

When looking at ICT professionals, a summit hosted by the Institute of Information Technology Professionals South Africa (IITPSA) at Leaderex in 2019 revealed that South Africa is in desperate need of ICT skills, and sadly, the Education sector is just unable to produce these skills in the numbers that South Africa needs.

These factors are just the tip of the iceberg that cause multinationals to search globally for the skills needed.

Skilled Artisans Still Sought After
The biggest jump in demand was recorded for Artisans with an increase of 60% from 2017 to 2019.

This is supported by the Government’s statement in 2017 that South Africa has a shortfall of about 40,000 qualified artisans, and this gap is expected to widen as demand continues to increase.

This forces industry to import skilled artisans from various countries to complete time sensitive projects.

Global Competition for Skills
Contrarily, whilst South Africa is seeking critically skilled individuals, recent reports have shown that the momentum of South Africans seeking opportunities abroad has increased significantly over the past 5 - 10 years due to the concern of economic growth in South Africa.

It is therefore important to be reminded that skills are globally sourced for the economic benefit of those countries and South Africa has to compete for scarce skills.

When viewing the results in their entirety, it remains evident that there is a continued lack of critically skilled individuals available in South Africa and key stakeholders need to address these problems collectively in an effort to reinvigorate the economy.

Please click here to view the full results.
https://www.xpatweb.com/2019-20-critical-skills-survey-results/

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/

“Expats who follow shady advice to deregister as taxpayers with SARS will suffer in the long run,” says Jonty Leon, Legal Manager (Expatriate Tax) at Tax Consulting SA.
 
This follows reports that some tax advisors are directing their expatriate clients to deregister with SARS to avoid paying tax on their non-exempt foreign income. According to Leon, this dangerous advice could result in a criminal act.
 
Background
Section 10(1)(o)(ii) of the Income Tax Act provides an exemption to South African tax residents who are employees that render services outside South Africa on behalf of a South African or foreign employer for longer than 183 full days in any 12-month period, as well as a continuous period exceeding 60 full days outside the country.
 
Previously, these expatriates where able to fully exempt their foreign income earnings from taxation, provided they met the requirements. Those who did not would have their income taxed as usual.
 
However, the law was amended with effect from 1st March 2020. After that date, although all other provisions remain the same, only the first R1.25 million in income is exempt. Any earnings above this threshold are subject to full taxation by SARS.
 
“Some expatriates now face a notable reduction in their earnings and are looking for solutions to reduce or nullify this tax obligation,” says Leon. Unfortunately, this makes them susceptible to questionable advice.
 
Criminal offence
Some tax advisors have directed their clients to simply deregister with SARS to avoid paying tax at all. According to the  Tax Administration Act, any South African earning local or foreign income must register as a taxpayer with SARS. To not do so is a criminal offence.
 
“If you deregister with SARS, this does not exempt you from being liable for tax. Your liability remains and you will eventually pay all outstanding tax on earnings during that period as well as penalties and interest you would have thought you had avoided,” says Leon. These taxpayers could also find themselves in court on charges of tax evasion.
 
The right way
However, advises Leon, there are two legal routes for which expatriate taxpayers may qualify.
 
One is financial emigration, which terminates their tax residency in South Africa if their situation meets the thresholds under the tax residency tests in South Africa to be considered non-resident. Those who become non-residents for tax purposes do not pay tax on their foreign income in SA.
 
The other is a Double Taxation Agreement. Expats working in one of the various foreign jurisdictions with which South Africa has a tax agreement may qualify for exemption from South African tax. However, there merely being a DTA in place does not automatically exempt one from being taxable in SA – very specific requirements must be met and provable.
 
“Either of these options can not only reduce one’s tax burden; they are also both legal,” says Leon.
 
Good advice
Leon offers three tips to help taxpayers remain on the right side of the law.
 
First, apply common sense: if the solution sounds too good to be true, it probably is. Seek a second opinion.
 
Second, have your tax consultant give some form of guarantee. The quality of their advice will increase dramatically with their level of accountability.
 
Third, choose a tax practice with a strong legal component. One or more tax attorneys on site suggests its solutions are based on correct interpretation of South Africa’s complex tax laws.
 
“Above all, do not deregister for tax,” says Leon. “It will be cheaper in the end to find a better tax advisor.”

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

Xpatweb recently conducted an extensive Africa Permit Risk Survey on 70 multinational employers across Africa to understand the impact of travel restrictions due to COVID-19 on their projects and employees.

Survey results show that 44% of respondents urgently require employees who cannot return to job sites due to travel restrictions, and 31% of these expatriates’ passports have expired.

Tarissa Wareley, an immigration expert at Xpatweb, says that immigration departments will need to streamline their approach to processing permits and visas’ backlog.

Employers as well as workers are also encouraged to start their visa renewal and application processes far ahead of borders reopening.

​“The process of getting the required work permit renewals isn’t necessarily as complex, but many African countries’ immigration departments will need to make provisions for workers who have been out of the country and therefore had documents that expired due to COVID-19 lockdowns.

Instead of having everyone start from scratch with the application process, immigration departments will benefit from creating a streamlined process to assist these foreign workers in getting back to their job sites as soon as lockdowns are lifted. Some countries have lead times of 2 – 3 months to process work permits and visa applications.

“We advise companies and workers to start their application processes early and for immigration departments to see where they can start assisting foreign workers who were unable to renew their visas due to the pandemic,” says Wareley.

Foreign work visa applications likely to receive more scrutiny
According to survey results, 48% of employers have new assignees that need permits to enter. Kenya, DRC, Mozambique, Tanzania, and Botswana were among the top five countries that require the entry of new expats.

“Employers who have identified critical personnel need to apply for the permits now as these applications will likely receive a larger amount of scrutiny to prove that a local cannot do the job due to many of these countries suffering job losses as a result of COVID-19. Employers may also need to start considering how they will transfer those skills to a local ahead of the permit being granted as these applications may need to be additionally motivated,” says Wareley.

How border closures have affected industries and projects
62% of survey respondents indicated that they had to postpone the start date of their critical projects due to the lockdown. The most affected sectors are oil and gas (14%), mining (15%), and construction (18%).

The countries that have been most impacted by projects that have not been able to start due to lockdowns are Kenya, Ethiopia, Mozambique, Madagascar, DRC, Botswana, Zimbabwe, Ghana, and Nigeria.

“With immigration departments still working despite travel restrictions, immigration processes should continue to be processed while we wait for borders to open. Processes are layered and complex, often taking several weeks to be adjudicated before someone can enter a country. Get your documents in place so that work can resume as soon as possible after border restrictions are lifted,” 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/
​

The most in-demand skills per DHET draft list and skilled Saffers leaving the country fuels the skills gap

The Department of Higher Education and Training released the draft list of Occupations in High Demand on 17 August 2020. The list is currently open for public comment until 7 September 2020. The list will serve as the basis for the Department of Home Affairs’ (DHA) updated Critical Skills list, which was originally expected earlier this year.

“The new Critical Skills list was expected to be released in April 2020, but the COVID-19 pandemic delayed this process,” says Xpatweb’s Marisa Jacobs. “The Occupations in High Demand list is now available for public commentary, submissions must be made by Monday, 7 September. The significance of the list is that it will form the basis for the updated Critical Skills list by the DHA which contains all the skills deemed in short supply in South Africa.

Thus, any person who fits the criteria contained therein may qualify for a Work Visa, under the Critical Skills Visa category, as per the Immigration Act.”

Xpatweb is running its fourth annual critical skills survey among local businesses, including JSE-listed companies and large multinational groups. Companies are encouraged to submit their inputs before 4 September on the skills they struggle to recruit locally.

 “It is important that employers are represented with a submission and inputs on any occupations not included on the list and the survey results will form the basis of this submission. It’s a tight deadline, but the response has been very positive. Survey respondents grew by 30% last year and we’re expecting an even greater spike this year as the local business community – across all sectors – are eager to give input on the government gazette that will determine which foreign skills local businesses can employ under the Critical Skills visa category,” says Jacobs.

As skilled Saffers immigrate, local companies need to recruit internationally for these critical skills
There is a growing concern among many South Africans that skilled people are leaving the country in droves, choosing to relocate to New Zealand, Canada, the UK, Australia and Mauritius to name a few. Any discussion about emigration numbers is complicated by the fact that there is no official bureau in South Africa that collects emigration data.

Resources from Stats SA, the United Nations International Migrant Stock database, and National statistics offices (NSOs) of foreign nations, however, suggest that upwards of 23,000 people per year are emigrating from South Africa.

“People who are emigrating are often skilled and experienced, which is why they can find work abroad. Therefore, it is important to be reminded that skills are globally sourced for the economic benefit of those countries and South Africa has to compete for scarce skills,” says Jacobs.

The Critical Skills List update is long overdue
The latest Critical Skills List by the Department of Home Affairs was published in 2014. According to Xpatweb’s annual survey, several occupations that corporate South Africa needs are not on the latest DHET Occupations in High Demand list, including several categories of ICT specialists and engineers, and foreign language speakers.

Occupations included range from chef, wine maker, tobacco grader and tour guide to nurse, rigger, actuary and software engineer

“There is a continued lack of critically skilled individuals available in South Africa and thanks to survey participants, we are able to guide the government’s critical skills list and help shape the decisions that will help local businesses reinvigorate the economy,” concludes Jacobs.

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/