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Wealthy South African expats due for 45 per cent tax rate
| Published: | 24 Jan at 6 PM |
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High-income South Africans living overseas are to be taxed at a rate representing almost half their income.
A swathe of new, more stringent tax legislation due to come in during March is sending shivers up the spines of ultra-wealthy South African expats earning over one million rand a year. Advance warnings state a tax rate of up to 45 per cent is likely, as the SA government needs to reduce pressure on its revenue department and treasury.
The threatened rate rise comes after last year’s tax hike, brought in to mitigate a substantial loss stemming from tax defaults all across the country. At the time, stringent measures aimed at ensuring compliance with South Africa’s tax laws were introduced, including threats of outing defaulters on public platforms. As a result, a number of unlucky defaulters have already been named and shamed.
According to tax experts, the swingeing increases are to be initially aimed at high-net worth individuals and companies who’ve relocated overseas simply to avoid South Africa’s soaring tax rates.Investigations have uncovered a number of cases in which illegitimate activity has taken place in addition to tax evasion, with some not even submitting tax returns and others submitting zero tax returns or falsely reporting themselves as being unemployed.
The behaviour of the few has now alerted the tax office to the extent that an audit will now focus on all citizens who’ve left the country and are ignoring tax demands. Non-compliant expat taxpayers are open to prosecution, with imprisonment for a term of up to two years the result. For ultra-wealthy South African expatriates, it would seem that ‘death and taxes’ really are inevitable.
A swathe of new, more stringent tax legislation due to come in during March is sending shivers up the spines of ultra-wealthy South African expats earning over one million rand a year. Advance warnings state a tax rate of up to 45 per cent is likely, as the SA government needs to reduce pressure on its revenue department and treasury.
The threatened rate rise comes after last year’s tax hike, brought in to mitigate a substantial loss stemming from tax defaults all across the country. At the time, stringent measures aimed at ensuring compliance with South Africa’s tax laws were introduced, including threats of outing defaulters on public platforms. As a result, a number of unlucky defaulters have already been named and shamed.
According to tax experts, the swingeing increases are to be initially aimed at high-net worth individuals and companies who’ve relocated overseas simply to avoid South Africa’s soaring tax rates.Investigations have uncovered a number of cases in which illegitimate activity has taken place in addition to tax evasion, with some not even submitting tax returns and others submitting zero tax returns or falsely reporting themselves as being unemployed.
The behaviour of the few has now alerted the tax office to the extent that an audit will now focus on all citizens who’ve left the country and are ignoring tax demands. Non-compliant expat taxpayers are open to prosecution, with imprisonment for a term of up to two years the result. For ultra-wealthy South African expatriates, it would seem that ‘death and taxes’ really are inevitable.
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