After receiving more than 1300 written comments to its draft bills, (760 of those commenting on the financial impact of the legislation), the National Treasury has presented the points raised during the public participation process to parliament’s finance committee. The Treasury revealed that most of the comments came from residents living in the Middle East, a low-tax region… ‘The tax will have a severely negative impact on finances and remittances to South Africa, especially for those on relatively lower incomes. This includes amounts to remitted family members to fund living costs in South Africa, investment in foreign income in some family run businesses, and money spent in South Africa during visits.’
Therefore The Treasury has said the initial draft of the Taxation Laws Amendment Bill will now be changed to allow for the first R1m of foreign renumeration to be exempt from tax in South Africa, providing the individual is outside the country for more than 183 days, as well as for a continuous period of longer than 60 days during a 12 month period. “The exemption threshold should reduce the impact of the amendment for lower to middle class South African tax residents who are earning remuneration abroad,” it said. “The effect of the exemption will also be that South African tax residents in high income tax countries are unlikely to be required to pay any additional top up payments to SARS.”
