Cape Town - Until I have confidence that my hard earned money goes to the benefit of the people of South Africa, I will do all in my legal power to not pay taxes.
This is the reaction of a Fin24 user working in Dubai over a proposal seeking to tax South Africans who work abroad for the minimum of 183 days if they aren’t already taxed in the countries they’re working in.
READ: South African working in Dubai worried stiff over new tax plans
"I find it very interesting that the government is going after a small percentage of decent hardworking expat South Africans, most of whom had no choice to leave South Africa because they cannot find employment there."
He recommended that careful thought be given to the following:
1. Whilst Dubai has a 0% income tax, residents are taxed on a consumption basis. This means, we pay exorbitant school fees, home rentals, municipality taxes, road taxes and service charges.
2. Due to the difference in currencies, South Africans living in Dubai are likely to fall into a high tax bracket. However, anybody living in Dubai will tell you that they won’t be able to survive here if they have to pay taxes.
3. Many people working in Dubai support families back in South Africa and send large amounts of money back home. This will in all likelihood stop if people are forced to leave Dubai.
READ: SA expatriates launch #taxpetition group
"Until I have confidence that my hard earned money goes to the benefit of the people of South Africa, I will do all in my legal power to not pay taxes in South Africa."
He further wants to know why the government thinks it is a good idea to tax a small percentage of South Africans who are not living there or making use of government services.
"The most effective and easiest thing to do seems to focus on stopping corruption," he said.
"It would be interesting to see how annual losses due to corruption stacks up against the estimated tax revenues the government think they can get by taxing Dubai residents. Additionally, it would be interesting to see how much less money would flow into the country if this tax is instituted."
The 183 day rule
Section 10(1)(o)(ii) of the Income Tax Act provide for a tax exemption for remuneration such as salary, wage, bonus, commission, earned by an employee in respect of services rendered outside South Africa for any employer in terms of his or her employment contract.
All the remuneration that the employee earns outside South Africa during that period will only be exempt if the employee is outside South Africa for a period exceeding 183 days, of which 60 days were continuous, during any 12 months period.
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