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Opinion: Home Affairs Needs Attention

Various ward councillors and officials in the Randburg area held a site visit at the Randburg Department of Home Affairs on 8 April.

There they met with the management of the department to discuss the current state of the facilities.

In the past year, ward councillors worked hard to improve the parking area for visitors to the department. “There is still no proper waiting area for those who are coming to apply for their IDs, birth and marriage certificates,” said Ward 104 councillor Mike Wood.

Constituency Head Kate Lorimer said, “This particular home affairs covers a vast area of Johannesburg. We are all aware of how low the morale of the staff members are at the Randburg Home Affairs, and it tends to provide an unhappy experience for those coming to apply for various documents. There is an important project that needs to be undertaken by the government to upgrade this very busy Home Affairs.”

Wood continued, “In ward 104, I and my fellow ward 102 councillor David Potter are working hard to get this facility sorted out. Home Affairs have been in the press lately for all the wrong reasons, and this one is a prime example. The toilets and the kitchens are in a diabolical state, and the Department of Home Affairs needs to step up to the plate. The working conditions for staff leave a lot to be desired.”

Wood stated that the main aim of the visit was to see how facilities could be upgraded for both staff and visitors to make sure that the experience of coming to home affairs is a pleasant one for all.

Wood also said that there is a budget to improve both the Roodepoort and Randburg departments, but nothing has come to fruition as of yet.

“We need to start with improving the basics, for instance, waiting areas and abolition facilities. The services themselves are good, so good in fact that more and more people from the surrounding areas are making use of this home affairs and not ones closer to them,” Wood added.

During the meeting with home affairs officials, any plans to upgrade the facilities would take place during this financial year.

“Unfortunately, as ward councillors in this regard, we don’t have the power to physically handle the matter ourselves, and all we can do is push the Department of Home Affairs itself to take action.”

Member of the Provincial Legislature in Gauteng Makashule Gana added, “Another important issue to raise is the fact there are over 3 500 identity documents waiting to be collected. With huge elections just around the corner, we urge the community to collect their IDs to make sure they can vote on voting day.”

 

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

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

Eskom Plans to Keep South Africa’s Electricity On This Winter

Public enterprises minister Pravin Gordhan has provided an update on the current electricity crisis in South Africa, stating that there is a plan for winter, and the next nine months.

At a media briefing on Wednesday (3 April), Gordhan said that Eskom and the Department of Public Enterprises has a better understanding of the challenges facing the power utility, and how to tackle them.

South Africa was hit with unexpected stage 4 load shedding in March, leaving roads grid-locked and citizens without power for hours at a time.

During that time, Gordhan could not provide any guideline on how to end load shedding, saying that an independent team of engineers was in the processes of assessing Eskom’s power plants to determine the extent of the problems.

While the team’s work is not yet complete – needing an additional few weeks – there is now enough information to plot a way forward, Gordhan said, particularly in preparation for the winter months, where demand on the grid is higher.

The minister said that while the aim is to ensure no future load shedding going forward – this is not a guarantee. “(If this aim fails), at the most, we will see only level 1 load shedding between now and the end of August,” he said.

Eskom chair, Jabu Mabuza, provided an update on major constraints that led to load shedding:

Coal stockpiles have improved;
Coal quality is also being focused on;
Eskom has been able to source more diesel, and is handling forward planning around diesel better;
Eskom is not retrenching workers, but is looking at voluntary separation packages to tackle its workforce issues.

Plan for winter

Eskom’s plan for winter is to look at different scenario’s based on available capacity on the national grid. The power utility has installed capacity of 46,500MW, with support from 2,000MW from renewable sources.

Unplanned outages due to boiler leaks, led to as much as 13,000MW being taken off the grid last month.

In a ‘no load shedding’ scenario, these unplanned outages need to be kept below 9,500MW, Gordhan said.

These are the scenarios:

Scenario 1

Unplanned outages is kept to under 9,500MW
No load shedding
Planned outages within a range of 3,000MW to 5,000MW

Scenario 2

Unplanned outages exceed 9,500MW
Maximum of 26 days of stage 1 load shedding over the 5 months
Eskom said that its units actually perform better in winter, due to lower temperatures, so it is confident it will be able to keep unplanned outages below the 9,500MW limit.

To keep the situation at scenario one, Eskom said it will increase supply from existing units, while bringing more power online.

Key to the plan, Gordhan said that there needs to be a shift from all South Africans in how they consumer electricity, along with more accountability from Eskom.

“Clearly plans are nice to have, the key is the discipline to ensure that implementation occurs. We need increased levels of accountability, said Gordhan. We are appealing to all to reduce the use of electricity. We don’t want load shedding,” he said.

 

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

Sources: [1], [2]. Image sources: American Public Power Association [1], [2].

MPs Concerned About Home Affairs’ Contract for Visas

The Portfolio Committee on Home Affairs wants the renewal of a contract to outsource the processing of visas reviewed, likening it to the controversial Cash Paymaster Services (CPS) contract.

The committee recently resolved to write to Minister of Home Affairs Siyabonga Cwele to review the contract with VFS Global.

The committee heard that the contract with VFS Global was renewed for two years in December, without it going through the open tender procurement process. The department initially contracted VFS Global in 2010.

Chief director of immigration services at the department Richard Stolz said the extension of the contract “was legally provided for”. He said there would have been an “immense” reputational risk to the department if there was a discontinuity in their operating model.

But MPs are highly critical of the deal.

DA MP Haniff Hoosen said it destroyed job creation in South Africa because the deal meant that several local companies providing visa services had to close their doors.

ANC MP and chairperson of the Portfolio Committee on Tourism Lusizo Sharon Makhubela-Mashele, who also attended the meeting, likened it to the South Africa Social Security Agency’s (Sassa’s) controversial dealings with CPS.

Committee chairperson Hlomani Chauke also subscribed to this idea.

“The extension creates a perception of another Cash Paymaster Services (CPS), which was the only service provider at the South Africa Social Security Agency said to have the capacity to render services. It is even more concerning that the department has extended the scope of work of VFS to establish services in countries it did not have previously,” Chauke said in a statement released after the meeting.

Several MPs said it seemed like the law was amended to deliberately give VFS Global a monopoly.

“Maybe, if we can’t conclude these issues, we must refer it to the Zondo commission [into state capture]. It is part of state capture,” Chauke said.

“Deliberately, you have amended legislation to create this monopoly. It killed all the small players.”

After being castigated by the committee, deputy director general of immigration services Jackie Mckay said: “We note all of the issues that are raised here.”

He acknowledged that it was not the first time that the committee had raised it.

“We take note of it.”

He said before the contract expired, they had started with an open tender process, but in April last year received a legal opinion to not follow such a process.

“That threw a spanner in the works,” Mckay said.

“We have no interest in who is delivering the service, as long as the service is delivered to us.”

Mckay said “serious, serious capacity problems” had been the bane of his existence.

“We just don’t have the staff.”

He said they had approached Treasury on several occasions, to no avail. This did little to appease the committee.

In his statement, Chauke said the committee would like to hear from Cwele about the possibility of going out on an open tender process and his plans to build capacity within the department to quickly process visa applications.

Cwele will be expected to respond to the committee within a week to ensure that the matter is dealt with before Parliament rises.

“While the committee acknowledges that Parliament has no right to inform the department on whom to contract for services, it would be a dereliction of its duty if it did not highlight cases where the department is deliberately breaking its own rules and guidelines,” read the statement.

“It is even more concerning that capacity in key tourism markets, such as Nigeria and India, is lacking, leading to few processed applications impacting on the numbers of tourists coming into the country,” Chauke said.

VFS Global describes itself as the “world’s largest outsourcing and technology services specialist for governments and diplomatic missions worldwide” on its website.

“The company manages the administrative and non-judgmental tasks related to visa, passport, identity management and other citizen services for its client governments. This enables them to focus entirely on the critical task of assessment.”

The company’s headquarters are in Dubai, its parentage is Swiss and it is a portfolio company of EQT, a global private equity firm headquartered in Stockholm, Sweden.

Last week, the committee also asked Cwele to investigate the department’s contract for the automated biometric identification system with technology company EOH.

 

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

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

Proposed Changes to South Africa’s Expat Tax Legislation

The South African government is making a move towards changing its tax on remuneration earned outside South Africa – which could see some expats pay as much as 45% on earnings outside R1 million.

According to Tax Consulting SA, National Treasury has invited key stakeholders to a workshop in March 2019 to address concerns around the planned regulations, which opens up the way for possible tweaking and changes ahead of the planned implementation date of March 2020.

Industry experts believe that the changes are a certainty, even if the draft laws are changed in some way before implementation – and this has some expats worried, with confusion persisting over who the new laws will affect, and how.

Current laws

Currently, South Africans who are earning income abroad are assessed in terms of residency.

In terms of section 10(1)(o)(ii) of the Income Tax Act, if you are working overseas and do not meet the physical presence requirements to be an ordinary resident in South Africa, you are exempt from tax on any foreign income.

To qualify for this exemption, an employee needs to have spent more than 183 full days (including a continuous period of more than 60 full days) outside of the country working, in any 12-month period.

If this requirement isn’t met, then the employee is taxed on worldwide income.

Proposed changes

Originally, the draft regulations proposed the complete repeal of section 10(1)(o)(ii) of the Income Tax Act – the section that deals directly with taxation on foreign remuneration.

Under these conditions, all foreign income would have been taxed by SARS, and citizens would have to claim a credit against South African tax payable for any foreign taxes paid on that foreign income.

The draft regulations were later softened to not be a complete repeal, but that section 10(1)(0)(ii) be changed so that only the first R1 million of foreign remuneration will remain exempt from tax in SA – even if an individual meets the requirements of exemption.

One of the main reasons given for the changes is to curb situations of double non-taxation – being situations in which an individual’s employment income is not subject to tax in either South Africa or in the foreign country where the services are rendered.

Who does it affect?

The proposed changes will affect any South African employees who are earning an income overseas, making over R1 million in the year of assessment.

It will also impact companies that send employees overseas for work, who will have to deal with the new tax implications.

South Africans who have permanently left the country, who have not settled their tax affairs (through financial emigration) may also be subject to the changes, depending on their individual circumstances.

Young people, or anyone who is travelling and working abroad who qualify for exemption under section 10(1)(o)(ii) will remain exempt, provided they earn less than R1 million in the year.

Non-residents

The tax changes could also impact people who are permanently living abroad, who currently qualify for exemption based on section 10(1)(o)(ii). These South Africans are typically not ordinarily resident in South Africa, but may have assets in the country, which could impact how SARS sees their tax affairs.

SARS has a set guideline – called the physical presence test – to determine whether a South African is resident, based on physical presence in the country.

This is for a period or periods exceeding:

91 days in total during the year of assessment under consideration;
91 days in total during each of the five years of assessment preceding the year of assessment under consideration; and
915 days in total during those five preceding years of assessment.
“An individual who fails to meet any one of these three requirements will not satisfy the physical presence test. In addition, any individual who meets the physical presence test, but is outside South Africa for a continuous period of at least 330 full days, will not be regarded as a resident from the day on which that individual ceased to be physically present,” SARS said.

If an individual passes the physical presence test, they will be taxed on their worldwide income in South Africa.

What if you are living in two countries?

In situations where South Africans are split between two nations – working overseas for extended periods of time, but remaining an ordinary resident in South Africa – SARS has double taxation agreements (DTA) with certain countries to determine who has exclusive rights to your taxes.

“South Africa has DTAs with a number of other countries with a view to, amongst other things; prevent double taxation of income accruing to South African taxpayers from foreign sources, or of income accruing to foreign taxpayers from South African sources,” SARS said.

In an interview after the draft regulations were published, Sable International, explained that DTA has different checks and balances, but typically boils down to where most of your assets are (like a permanent home) and where your family is. However, this is subject to a more in-depth investigation from SARS.

It is worth noting, however, that for ordinary residents, all income sources within South Africa will still be taxable in South Africa.

The coming laws only apply to your foreign income – normal tax is paid on all South African assets and capital gains made on those assets in the country.

South Africans who have permanently left the country, who still have assets in the country, are still taxed on those assets, with the only way to divorce being through financial emigration.

Is financial emigration necessary?

According to Sable International, financial emigration – being the legal process of cutting all tax ties to South Africa – may not be necessary to avoid the expat tax, provided you meet the right requirements.

If you are a non-resident (South African living abroad) and can prove to SARS you are ordinarily resident in the country you’re living in, then the tax should not apply.

If you are in a dual-residency situation, SARS may have a DTA with the country you’re living in that may make you exempt.

However, this is specific to each individual situation, with no real general exemption that applies to all expats outside the section 10(1)(0)(ii) limits.

 

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

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

Key Announcements in SA’s State of the Nation Address

South African President Cyril Ramaphosa delivered South Africa’s State of the Nation address last night, and announced a number of changes for the country going forward. Among them are plans to attract foreign direct investment, improve the quality of education, and resolve Eskom’s (the country’s power utility) debt crisis. The date of the 2019 general election was also announced; 8 May. Key announcements are outlined below.

Eskom will be split in three

Government plans to “immediately embark” on a process of establishing three separate entities – Generation, Transmission and Distribution – under Eskom Holdings. “The consequences may be painful, but they will be even more devastating if we delay,” Ramaphosa said.

‘Investment books’ will be compiled for each province

Following the success of the 2018 investment conference which attracted over in R300 billion in investment, Ramaphosa said a second conference will be held in 2019. Investment in South Africa should be spread out in projects throughout the country, Ramaphosa said. “In this regard, I have asked provincial governments to identify investable projects and ensure that we build investment books for each of our nine provinces to present to potential investors,” Ramaphosa said.

A new target to improve South Africa’s ease-of-doing-business ranking

Ramaphosa said the World Bank’s annual Doing Business Report currently ranks South Africa 82 out of 190 countries tracked. The state aims to be among the 50 global performers within the next three years, Ramaphosa said. A team from the Presidency, Invest SA, National Treasury and the Department of Planning, Monitoring and Evaluation will address the policy, legal, regulatory and administrative barriers that frustrate investors.

A requirement for work experience will be dropped in the public sector

It is important that more youth be absorbed into South Africa’s labour market, Ramaphosa said. The government would, therefore, do away with entry-level work experience requirement in the public sector. “Our young people need to be given a real head start in the world of work,” he said.

Release of state-owned land for human settlements

Ramaphosa said as part of accelerated land reform, the government identified land parcels owned by the state for redistribution. Strategically located land will be released to address human settlements needs in urban and peri-urban areas, he said.

Introduction of eVisa regime

The South African government will introduce a “world class” eVisa regime in 2019 to assist in growing the local tourism sector, Ramaphosa said. The goal is reach 21 million tourists by 2030, up from 10 million in 2018. Instead of applying for a South African visa at an embassy, prospective visitors will be able to apply for an eVisa online and the final visa can be printed at home.

New gas and oil legislation after the Brulpadda boon

Following Total’s discovery of “world-class” oil and gas in the Brulpadda field off the coast of South Africa, Ramaphosa said the government will develop legislation to ensure that it is properly regulated for the interests of all concerned. “We are extremely encouraged by the report this morning about the Brulpadda block in the Outeniqua Basin, which some have described as a catalytic find. This could well be a game-changer for our country and will have significant consequences for our country’s energy security…”, ANC National Chairperson Gwede Mantashe stated.

New infrastructure implementation model

Ramaphosa said Cabinet has adopted a new infrastructure implementation model to ensure projects are implemented. He said the new model is underpinned by the new Infrastructure Fund announced in September last year. Ramaphosa said government has committed to contribute R100 billion into the Infrastructure Fund over a 10-year period and use this to leverage financing from the private sector and development finance institutions. “As a first step, we will expand projects underway already, such as student accommodation.”

Eradicate unsafe school toilets within 3 years

Ramaphosa expressed deep sadness at the tragic deaths of Michael Komape, who drowned in a pit toilet at Mahlodumela Primary School in Limpopo in 2014, and Lumka Mkethwa, from Luna Junior Primary School in the Eastern Cape, who lost her life in March last year. He said the government has since August already provided safe and appropriate sanitation to 699 schools, with sanitation at a further 1,150 schools either in planning, design or construction stages. Government identified that nearly 4,000 schools require appropriate sanitation, and hopes to eradicate unsafe sanitation by 2022.

Compulsory early development for all children

The responsibility of early childhood development centres are being migrated from the social development department to basic education, Ramaphosa said. He said during the migration the government will proceed with the process towards two years of compulsory early childhood development for all children before they enter grade 1. “This is essential in equipping children to succeed in education, in work and in life – and it is possibly the single most important factor in overcoming poverty, unemployment and inequality,” Ramaphosa said.

Access to a tablet for every pupil by 2025

“Over the next six years, we will provide every school child in South Africa with digital workbooks and textbooks on a tablet device,” Ramaphosa said. He said government will start with the schools that have been historically most disadvantaged and are located in the poorest communities, including farm and rural schools.

New technology subjects, and technical high schools

Ramaphosa said several new technology subjects and specialisations will be introduced into basic education such as technical mathematics and technical sciences, maritime sciences, aviation studies, mining sciences, and aquaponics. Several “ordinary” state schools will also be transformed into technical high schools, he said.

A new bank for housing

If the South African government is to effectively address the substantial housing backlog it needs to develop different models of financing for human settlements, Ramaphosa said. Therefore a new human settlements development bank will be established to leverage both public and private sector financing to aid in housing delivery. He said the state’s housing development agency will construct an additional 500,000 housing units in the next five years..

No taverns, shebeens and liquor outlets near schools

Ramaphosa promised the complete shutdown of all taverns, shebeens and liquor outlets near schools as the country deals with extremely high levels of substance abuse. “South Africa has extremely high levels of substance abuse, which feeds crime and violence against women and children, it deepens poverty and causes great hardship and pain for families. As government, we continue to roll out interventions to address social ills tearing our communities apart, such as alcoholism and substance abuse. Knowing, as we do, that there are strong linkages between substance abuse, drug trafficking, crime and insecurity in communities, we are focusing on tackling this problem at its source through prevention programmes targeting vulnerable persons especially our youth. We are resolute that all taverns, shebeens and liquor outlets near school premises must be shut down,” Ramaphosa stated.

Strengthening the focus on gender-based violence

“We will strengthen the national hotline centre that supports women who experience gender-based violence and ensure it is functional. We have listened to the call to make funds available to combat gender-based violence and have allocated funding in the current budget to support the decisions taken at the [Gender-Based Violence] Summit. Government will lead the campaign to include men and boys as active champions in the struggle against gender-based violence. Ending gender-based violence is an urgent national priority that requires the mobilisation of all South Africans and the involvement of all institutions,” Ramaphosa said.

Scorpions 2.0

Ramaphosa said he agreed with the new NPA head that an investigation directorate dealing with serious corruption and associated offences will be established as soon as possible. In broad terms, the Directorate will focus on the evidence that has emerged from the Zondo Commission of Inquiry into State Capture, other commissions and disciplinary inquiries, Ramaphosa said.

General election date

National elections will be held on May 8.

A war room for public health

The National Health Insurance Bill will soon be submitted to Parliament. The NHI will enable South Africans to receive free services at the point of care in public and private quality-accredited health facilities. Ramaphosa said a ‘War Room’ in the presidency has been established to improve public heallth. “We have a funded national quality health improvement plan to improve every clinic and hospital that will be contracted by the NHI.”

To read the SONA address in full, click here.

 

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

Sources: [1], [2], [3]. Image sources: [1], [2].