Tag Archive for: Finance

Sisipho Ntsabo
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Johnson and Johnson COVID-19 Vaccinations Halted After Cases of Blood Clotting Emerge

The injections of the single-dose Johnson & Johnson COVID-19 vaccine has come to a sudden halt in various countries across the continent due to rare blood-clotting syndrome emerging in six recipients.

The six recipients were all women between the ages of 18 and 48, and all developed the illness within one to three weeks of being vaccinated. All the six women who suffered what is called ‘cerebral venous sinus thrombosis’ are reported to have had low platelet counts. Frontline experts hypothesize that the vaccine activates platelets and leads to blood clots in channels that help transmit blood away from the brain. The blood clots can cause strokes or damage to the brain.

Action taken by European and Northern American states                                                                                                 

On the 9th of April 2021, the European Medicine Agency (EMA) announced its Pharmacovigilance Risk Assessment Committee (PRAC) were reviewing the Janssen COVID-10 vaccine safety signals, following reports of blood-clotting occurrences in four recipients of the Janssen vaccine in the USA. On 13th April 2021, due to concerns over the Janssen vaccine, the United States Centers for Disease Control and Prevention (US CDC) and Food and Drug Administration (FDA) has recommended a halt in the administering of the COVID-19 vaccine.

The Janssen COVID-19 vaccine in African states

In a statement to African Union (AU) Member States, the African Centre for Disease Control and Preparation (Africa CDC) issued a statement consolidating the J&J vaccine predicament in Africa. The Africa Regulatory Taskforce has endorsed the Emergency Use Authorization for the Janssen COVID-19 vaccine.

At present, South Africa is the only member state permitting the Janssen COVID-19 vaccine. Registered by the South African Health Products Regulatory Authority (SAHPRA), over 290 000 doses have been administered. On 13th April 2021, South African Health Minister, Dr Zweli Mkhize announced that the country had no reports of any blood clots following the administering of the Janssen COVID-19 vaccine. As a precautionary measure, South Africa has announced that the rollout of the vaccine will be halted to review and assess the situation alongside global regulatory authorities.

Recommendations from the Africa CDC to the AU Member States

The Africa CDC states, “As such rapid access to safe and effective vaccines is paramount to the African Union vaccination strategy to achieve control of the pandemic. Africa CDC will continue to monitor reports of adverse events following immunization, for all COVID-19 vaccines, including the Janssen COVID-19 vaccine, and will provide further guidance to Member States.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

16 April 2021| by Sisipho Ntsabo                                                                   Relocation Africa

Andrew Stegmann
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Warning Over Government’s Plans to Change South Africa’s Emigration Finance Rules

A number of tax and financial groups have issued warnings over a new draft bill which will introduce changes for South Africans looking to take their retirement funds out of the country.

Under the current system, members of preservation funds and retirement annuity funds may withdraw from such funds if they formally emigrate from South Africa for exchange control purposes and their emigration is approved by the South African Reserve Bank

However, changes in the draft Taxation Laws Amendment Bill (TLAB) will effectively phase out the concept of emigration for exchange control purposes.

The amendment will mean that South Africans emigrating from the country will only be able to make a withdrawal when a retirement fund member has ceased to be an tax resident and has remained so for a consecutive period of at least three years.

The change has come under fire as the TLAB was the subject of public hearings in parliament on Wednesday (7 October).

Impractical and draconian

“The proposed requirement that an individual be non-resident for a period of three years prior to being entitled to access retirement funds is impractical, draconian and will present administrative difficulties for both SARS and taxpayers,” said professional services firm PwC in its submission.

The firm said that where an individual permanently departs from South Africa, the proposed rules could – depending on the particular circumstances of that individual – result in considerable financial hardship for an extended period of time before retirement funds are available.

“Under the current rules, a person who emigrates is entitled to withdraw their retirement funds immediately. Under the proposed rules, they would now need to wait for at least three years before being able to do so,” the firm said.

“Retirement funds are frequently required by emigrants to make emigration financially viable and the proposed rules will severely impact this.”

As an alternative, PwC recommended that the proposed three-year residence rule should be replaced with another ‘more practical rule’.

“For example, it could be linked to a person ceasing to be ordinarily resident in South Africa – as opposed to necessarily not tax resident,” it said.

The opposite of modern

In its submission,  Tax Consulting SA said that the amendment is at ‘cross purposes’ to its intended goal of a more ‘modern’ exchange control system.

It highlighted that under the new system , retirement benefits will effectively be locked in and will be inaccessible to the individual in question for a minimum period of three years, even after they have left South Africa permanently.

This restriction will only be lifted once the taxpayer in question is able to prove they have been non-resident for an uninterrupted period of at least three years.

“By any measure, this new test is the opposite of modernisation and a step back towards locking in retirement funds after becoming non-resident for tax and exchange control purposes,” it said.

“Furthermore, if the test is to be based on residency, it is not clear why withdrawal is subject to a period of three full years. If the taxpayer has ceased residency, why impose a punitive lock-in of this extent?,” the firm asked.

Tax Consulting SA that the proposed amendment will do away with a well-established process that allows emigrants to freely expatriate their retirement benefits with one that is far more restrictive and less transparent.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann
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Financial Emigration: Changes to the Withdrawal of Retirement Funds in South Africa

This information was provided to us courtesy of JJ Accounting Services Mauritius.

The draft Taxation Laws Amendment Bill (“TLAB”) was published on 31 July 2020. As announced in the Budget Speech, any South African leaving in future will be subject to a much stricter process from 1 March 2021 onwards.

The amendment comes as no surprise, as government made its intentions clear in the February 2020 Budget Speech, per Annexure C to the Budget Review: “As a result of the exchange control
announcements in Annexure E, the concept of emigration as recognised by the Reserve Bank will be phased out. It is proposed that the trigger for individuals to withdraw these funds be reviewed”.

Current position

Under the current dispensation, taxpayers may withdraw their retirement funds prior to their retirement date, upon emigration for exchange control purposes, where such emigration is recognised by the South African Reserve Bank. This concession is provided for in the respective definitions of “pension preservation fund”, “provident preservation fund” and “retirement annuity fund” (collectively referred to as “retirement funds”) in section 1 of the Income Tax Act No. 58 of 1962 (“the Act”). Each definition makes provision for withdrawal where a person “is or was a resident who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control”.

In essence, the above proviso permits a person to withdraw his retirement benefit upon completion of a process of emigration through the South African Reserve Bank.

Proposed amendment

The proposed amendment follows the February 2020 Budget Speech, where the government made its intentions clear to overhaul this process as part of the modernisation of its exchange control system, as stated in Annexure C to the Budget Review: “As a result of the exchange control announcements in Annexure E, the concept of emigration as recognised by the Reserve Bank will be phased out. It is proposed that the trigger for individuals to withdraw these funds be reviewed”.

The TLAB, specifically paragraphs (h), (k) and (m) of section 2(1), gives effect to this decision, by amending the proviso to the aforementioned definitions in section 1 as follows: “is a person who is [or was] not a resident [who emigrated from the Republic and that emigration is recognised by the South African Reserve Bank for purposes of exchange control] for an uninterrupted period of three years or longer” (emphasis added).

In other words, reference to the emigration process is substituted with a new test that requires a person to prove they have been non-resident for tax purposes for an unbroken period of at least three years. This new test will apply from 1 March 2021. How this must be proved other than ‘financial emigration’ remains unclear at this stage.

Practically, as from the effective date of 01 March 2021, retirement benefits will be locked in South Africa for at least three years. The proposed amendment signals a big policy shift from a fiscal perspective, but this is one piece to a bigger puzzle that should have those who seek to emigrate on high alert.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].