To SA from Bermuda: There is no such thing as tax-free havens

Apr 19 2017 13:54

ADD YOUR VOICE: MyFin24 is the platform for our users to air their views on hot topics and pressing issues, and for sharing ideas to help other users cope in a challenging financial environment.

A Fin24 user living and working in Bermuda shares his views on the proposed new tax by government for expats. The user, who wished to remain anonymous, was responding to a proposal in the budget review that South Africans living in tax free havens must pay income tax to add to the fiscus in their birth countries.

The idea to start taxing South African expatriates working in so-called tax-free havens has no merit because the cost of living is extremely high in these countries, he writes.

"My wife and I are currently based overseas, Bermuda (the most expensive country in the world), where there are many South Africans adding to the Bermuda economy rather than the South African one. I would like to point out that many SA expats choose to go work overseas where their appointment and performance is based solely on merit and where hard work gets rewarded.

READ: SA expatriate in Philippines dismisses high life myth

The idea to start taxing expats where they do not pay tax already, in my mind is an easy way out for SARS and the government to further tax what is clearly aimed at the qualified/professional expat, and take what they can before actually trying to solve corruption within government.

As many expats would tell you, the cost of living is extremely high in most of these tax havens, and the truth is that they are not really tax havens. In Bermuda for instance, there is something called payroll tax, which as low as it might be, is still deducted from your salary. There are many other government taxes priced into everything, so before SARS decides to tax these expats, maybe they should understand that just because there is no income tax in a specific country, that does not mean no "tax" is paid in that country.

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

My wife and I planned on going back to South Africa at some stage, but with the final downgrades there is, according to me, no logical reason anyone would want to go back and pay any tax.

We have a couple of properties, investments and all our retirement savings in South Africa, but we may have no option but to get rid of all these investments and permanently immigrate overseas.

The saddest thing about this entire attack on our democracy is the fact that most expatriates, including us, have our families back in South Africa; parents, brothers and sisters. Most of these people do not have the opportunity to flee the country.

READ: Poor economic growth dragging down tax revenue

There is still hope for South Africa, and if not before then, come 2019 elections every citizen should do the talking at the voting booth."

Disclaimer: All letters and comments published in Fin24 have been independently written by members of the Fin24 community. The views are therefore their own and do not necessarily represent those of Fin24.

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.

bermuda  |  myfin24  |  taxes



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