MUST READ: SA expatriate in Philippines dismisses high life myth

Mar 22 2017 13:59

Cape Town - South Africans working abroad hardly live extravagantly or travel the world over - and the job  comes at the painful cost of friends and family, according to a Fin24 user working in the Philippines.

Robin James Clare-Talbot has several years experience in mining, petro-chemical and power projects and worked on Kusile and Medupi power plants in South Africa.

He added his voice to fears over plans by the South African government to tax expatriates working in non-tax jurisdictions.

READ: South African working in Dubai worried stiff over new tax plans

"There are also expatriates that work abroad who are exposed to taxation within that county."

Clare-Talbot said he is subject to approximately 32% taxation on his earning. Based on the tax table in South Africa, he said he is benefiting from a 9% increase in his take home pay.

"This is enough to convince me to stay in the Philippines and gladly pay tax towards a government where you can see the spend going to the people," he said.

"Simple things like road infrastructure, poverty alleviation, public transport, fantastic government-funded pension plans, and most importantly for the higher earners, very good government-backed medical aid equivalents."

However, amid these advantages, Clare-Talbot said he easily forgot one important thing.

"While the expatriate life is seen as the high life, it is still a regular job like anyone at home in South Africa, without the benefits of the security of friends and family."

He explained that choosing to live the life of an expatriate is testing on families, however decisions are made and justified for even a 9% increase in salary because it is better than having to worry about being the next person relieved of their position and having to look for work again.

READ: Taxing SA expats in Dubai: 3 points to consider

"As previous writers have also stated, the cost of living for expatriates is vastly more than that of the cost of living in South Africa. Everything from accommodation, schooling, food and entertainment is by any measure no less than 30%-40% higher in these countries," said Clare-Talbot.

According to him, workers in the engineering and construction industries used to earn above average salaries, but now the average salaries in South Africa for such employees simply make it unaffordable to even live a moderate lifestyle, let alone investing for retirement, enjoying their children going to a good school and having some small luxuries in life.

"These are the small things that the engineering and construction majority of expatriates enjoy whilst in the respective country of assignment," said Clare-Talbot.

He added that it must also be taken into account the amount of money expats still spend or invest in South Africa while working abroad.

READ: SA expatriates launch #taxpetition group

"It is not a simple task opening foreign bank accounts in many countries and therefore a large majority of expatriates still get paid into their South African bank accounts. They therefore pay South African bank fees and invest that money into the South African economy."

Clare-Talbot pointed out that South African expatriates are not likely to travel the world when they have a much-deserved holiday, but end up returning to South Africa and therefore spend the small amount of additional money accrued back in South Africa.

"If the global taxation approach is taken, I personally am certain it will not have the benefit the government hopes to recoup additional taxation, as it will force the expatriates to formally emigrate to a country that allows expatriates to work abroad and pay their relevant taxes if any in that country."

Read Fin24's top stories trending on Twitter:

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.




Company Snapshot

We're talking about: MINI BUDGET

Finance Minister Malusi Gigaba has laid bare South Africa's economic woes. Visit our Mini Budget Special for all the action.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Free education in South Africa is:

Previous results · Suggest a vote