Eliminating tax exemption for South African expats is unfair, discriminatory and regressive
The move by South Africa to abolish tax exemption for South Africans overseas is totally unfair, highly discriminatory, and achingly regressive.
Plans are being put in place by SARS, South Africa’s Revenue Services, to domestically tax individuals who earn money abroad – despite the fact they would still be taxed on their earnings overseas as well.
As it stands now, people working in another country for over 183 days per year are not obliged to pay tax on income from overseas.
However, SARS’ plans to scrap this exemption will come down hard on the hundreds of thousands of South Africans who live and work outside South Africa.
This action is completely unfair and goes against the fundamental principal of taxation: that the taxpayer benefits from government services, including education, healthcare, police services and roads.
Indeed, these plans are extremely prejudiced. It is unjust to tax a person simply because of their citizenship. Residence and/or territoriality are the only conditions upon which a fair system of income tax should be based.
Furthermore, this archaic move to double tax South African expatriates, in effect, binds them to South Africa, which means they would no longer benefit from the same freedoms as nearly every other citizen in the world.
Under these plans, these people would be penalised for residing abroad. Yet it should be the exact opposite.
South Africans living overseas should be championed. They are some of the most important ambassadors the country has across the globe, and play a vital role in determining the international viewpoint of South Africa and its fundamental values.
There are currently only two other countries on the planet that uphold this outdated, ill-advised, erroneous citizen-based taxation (CBT) regime: the U.S. and Eritrea.
A campaign is mounting for the United States to change from this CBT system to residence-based taxation. As such, it is painfully regressive for South Africa to be looking into implementing CBT.
The Draft Rates and Monetary Amounts and Amendment of Revenues Laws Bill, will remain open for public comment until the 18th August. Therefore, I would strongly urge all South Africans both at home and abroad, who care about freedom and prosperity, to ensure their voices are heard.
Indeed, double taxing South Africans who wish to live and work in another country is not the correct move forward for a modern, democratic nation.