By Neill Hobbs
Is it worth my while to continue living and paying tax in South Africa?
This is a hard-hitting question that keeps many of us awake at night, and it is the most frequent question I am asked to give tax advice on.
Here is the conundrum: I love South Africa; we have so much to offer the rest of the world. I love our diversity, I love the braaivleis, rugby & sunny skies lifestyle. My business is here, and my home is here, but should I be looking elsewhere?
The global landscape
Let’s acknowledge the reality: the world is facing more challenges than ever before, at least in our lifetimes. Leadership is lacking at all levels of government in many countries. Inconceivable conflicts persist. In some parts, leadership trends are becoming increasingly aggressive and repressive, and many countries are grappling with a high cost of living, or a labour crisis and the global outlook is expected to remain weak in 2024.
And then there’s South Africa – a nation that has a knack for surprising the bookies, for beating the odds, for winning World Cups, and a propensity to just keep on trucking.
Insight from afar
In the words of Ayn Rand: “When you see corruption being rewarded and honesty becoming self-sacrifice – You may know that your society is doomed.”
Recently, I had the opportunity to gain a fresh perspective during my trip to Europe. I realised the huge risk of us ignoring the danger signs and not facing them head-on. We are undoubtedly a beautiful nation, brimming with promise, and rich in skills, minerals, and opportunities. Yet, we can no longer bury our heads in the sand and ignore the problems and challenges we face – unemployment, crime, crumbling parastatals, pervasive corruption, failed municipalities, and increasing infrastructure failures to provide water, electricity, medical care and education. Things that are inalienable rights in our Constitution and Bill of Rights!
A critical turning point
It reminds me of often-quoted words from a novel: “How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.”
Reality check; we are at that “suddenly” point.
So, what do we do if, like me, you are a staunch patriot, deeply enamoured with your country and its potential, yet compelled to confront the stark reality of living in a state that is failing on so many fronts? It’s time to be rational and pragmatic and to employ clever strategies.
In today’s interconnected world, we must consider a global outlook when structuring our financial affairs. Diversifying internationally and spreading risk can be achieved more easily and affordably than it may seem. It is possible to mitigate financial risk while contributing to the growth of your financial interests beyond South Africa. Having a strong South African business base is a great opportunity to diversify internationally, spread risk and extend your base. It is possible to safeguard your financial future and contribute to the growth of your assets, no matter where in the world they may be.
As South Africans we are faced with unforgiving obstacles and hard constraints, however, while challenges exist, so do opportunities.
As the saying goes, “Trust in God, but tie your horse to a tree.”