The silver lining in SA's ICT Skills Brain Drain

NEWS | THE SILVER LINING ON SA’S ICT SKILLS BRAIN DRAIN

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Recent reports indicate that the South African ‘brain drain’ has gained momentum as skilled professionals look to better opportunities abroad, often driven by concern about South Africa’s economy, crime and other factors. Some reports put South Africa’s brain drain among the highest in the world, with Xpatweb reporting a sharp increase in the number of in-demand skills leaving the country. In multinational technology and consulting organisations, top South African candidates are increasingly being poached, transferred or promoted abroad within these organisations. Senior people are leaving the country to advance their careers after being affected by retrenchments or forced into early retirement. Not only does this exodus create immediate skills gaps – it also hampers mentorship and development of less-experienced staff.

In many cases, these key, senior ICT resources depart with little notice or time for effective succession planning. In our own organisation, we have seen it taking as little as 6 weeks from a candidate getting an offer abroad, to the time they leave the country.

For the ICT sector, already grappling with a lack of advanced next generation technology skills, particularly in fields such as robotics, AI and data science, this brain drain is leaving a significant skills gap and causing significant concern among companies that urgently need these advanced skills to innovate, grow their organisations and remain globally competitive.

There is a massive skills shortage for true data scientists and big data consultants with experience in HIVE, Spark, Kafka, NiFi and Ranger, to name a few. Many local organisations are seeking to fill gaps by recruiting from countries such as Zimbabwe, Nigeria, Iran and Poland, which offer excellent training in data science and data engineering. These candidates are typically highly skilled, passionate, driven and demonstrate a hunger for a career in ICT – making them a compelling proposition for local employers. However, importing key skills is often hampered by work visa hurdles. It also does little for South Africa’s ambitions to become a knowledge society, and empower a new generation of ICT skills and support the local economy.

While the quest for key ICT skills is a challenge, the situation presents a number of opportunities for South Africa to find innovative new ways to improve skills development, succession planning and employment conditions – all of which will benefit employers and employees in the long term.

The new gaps being created in the market are generating opportunities for people coming up through the ranks to grow into those positions.  Organisations should take the opportunity to identify key resources early on and put proper succession plans in place for key resources – not only to mitigate the risk of sudden skills gaps, but also to ensure sustainable growth in the workplace.

They need to significantly step up their skills development programmes, bearing in mind that many graduate programmes see candidates job-hopping for nominal increases, or simply for better working conditions, such as more flexible working hours. Employers should move to mitigate the risk of losing key resources by making an effort to understand what motivates their employees, and then moving to offer better working conditions, improved work-life balance, mentorship and more opportunities for personal and professional development. By doing so, organisations will not only improve their chances of retaining scarce skills, but will also improve working conditions for the entire company, with improved staff morale and bottom line as a result.

Source: Knowledge Integration Dynamics

All you need to know about expat tax is now in one place

NEWS | ALL YOU NEED TO KNOW ABOUT EXPAT TAX IS NOW IN ONE PLACE

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It has also contributed to the first publication of its kind that deals with the tax considerations of South Africans abroad or those with international interests, and foreigners working and living in SA.

LexisNexis’ new publication titled, Expatriate Tax : South African Citizens Working Abroad and Foreigners in South Africa, is authored by  the independent specialist tax practice Tax Consulting South Africa and explores the fiscal legislation and the approach to tax law from a practical perspective.

In his foreword Judge Dennis M Davis, Chairman of the Davis Tax Committee and Judge President of the Competition Appeal Court, says expatriate tax planning and compliance necessitates an understanding of South African tax law, but also of international tax law, and that the publication provides a clear understanding of the tax consequences of migration.

Tax Consulting is of the view that when there is any discussion around expatriate tax, one cannot have it without also having the discussion around work visas, residency permits, and citizenship considerations.

The book devotes a whole chapter on these issues.

Co-author and lead, tax technical at Tax Consulting Jean du Toit says it is quite apt for their firm to have written the book at this time.

The way that expat tax is going to be dealt with is set to change on 1 March 2020.

The current foreign income exemption will from then on be capped at R1million and calls for proper tax planning going forward.

The textbook is written not only for technocrats, but also for officials of the South African Revenue Service, employers, human resources specialists and even for laymen who wish to understand their tax obligations.

“The book is quite technical but it is balanced with practical examples and explanations about the SA tax system. It gives a lot of context to some of the provisions in the legislation and why it was enacted.”

Du Toit says the book follows a logical flow as it starts with an overview of the South African tax system and how certain sections and provisions have to be interpreted.

It also covers specific areas that goes hand in hand with emigration and immigration namely work visas, remuneration strategies, exchange control and how it will affect your tax obligations.

“It gives clear guidance on what to do when people are planning to leave the country, if they have already left and if they are coming back. It is important for any taxpayer to understand their tax obligations as they are ultimately responsible for their own affairs despite having a professional assisting them.”

Marisa Jacobs, director of Xpatweb, says there has been a lot of talk in the market and at the launch of the book, hosted by the British Chamber of Business in Southern Africa, of long processing times and inconsistencies in terms of the requirements for visa processes when dealing with expatriates.

However, they follow a proactive approach and are not experiencing these heavy delays.

“Where an immigration provider is prepared and engages correctly (with the

Department of Home Affairs and the various embassies) the delays are not so common.”

She says they have included work visas and residency permits in the book because when having a discussion around (expat) tax, you cannot have it without also having a discussion around visas and permits.

“The wrong decision on a work visa category can have a devastating financial impact for a company or an individual where you trigger tax and exchange control residency too soon.”

The critical skills list, which has been hotly debated after a draft list was leaked, is expected to be published by April next year.

Xpatweb runs the annual critical skills survey (which will close on 27 November) and the results will be submitted to the department before the list is finalised.

Jacobs acknowledged the work that has been done by the department to reduce turnaround times and says there is “significant show” that they are improving their efficiency.

Critical need for skills development in local building sector

NEWS | CRITICAL NEED FOR SKILLS DEVELOPMENT IN LOCAL BUILDING SECTOR

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The quarterly drop in total employment, said the report, was largely due to decreases in the following industries: manufacturing (-1.2 percent), business services (-0.6 percent), trade (-0.4 percent), construction (-1.5 percent) and electricity (-1.7 percent).

Of serious concern is the fact that 40,3 percent of the country’s youth, aged between 15 and 24 years (20.4 million individuals), are not in employment, education or training. In fact, President Cyril Ramaphosa dubbed this a ‘national crisis’ in his State of the Nation Address (SONA) earlier this year, saying that youth unemployment “demands urgent, innovative and coordinated solutions where all of us should see it as a requirement to work together”.

At the same time skills shortages are deepening, with a combination of retrenchments, baby boomers reaching retirement age (having a knock-on effect on mentorship measures) and an increase in emigration figures all contributing to the so-called ‘brain drain’. This has been keenly felt in the technology, engineering, finance and health sectors, with a particular demand for artisans to help deliver on South Africa’s Strategic Infrastructure Projects (SIPs), which include the building of roads, bridges, schools, harbours, power stations, and other social and economic infrastructure.

Back in 2017, government revealed that South Africa needed around 40,000 qualified artisans for time-sensitive projects. Recent research conducted by Xpatweb shows that this is still a challenge. The survey says that 14.15 percent of the respondents are still struggling to find skilled artisans, up 45 percent from last year.

In particular demand are bricklayers, electricians, millwrights, boilermakers, plumbers, mechanics (including automotive and diesel), carpenters and joiners, welders, riggers, as well as fitters and turners (including mechanical and pipe fitters).

It is clear that there is an urgent need for skills transfer and education at the artisan level, with an emphasis on fast, but high-quality technical training. This will not only play an important role in boosting the economy, but also create a positive turn-around in unemployment levels.

EVENT | HOME AND AWAY: EXPATRIATE TAX LAW UNPACKED IN LONDON

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The South African Chamber of Commerce (“SACC”) in the United Kingdom is pleased to announce that it has secured a presentation by Jerry Botha and Marisa Jacobs, from Tax Consulting South Africa (“TCSA”)  and Xpatweb respectively, on the new expatriate tax law change promulgated under South African law effective 01 March 2020. This is hot off the heels of the sold-out events held in Mauritius and South Africa, which were hosted by SACC in Mauritius and the British Chamber of Business in Southern Africa respectively, on which excellent attendance feedback was received.

Jerry’s presentation will share deep and practical insights with attendees, dealing with some hot topics such as whether to retain South African citizenship, permanent residency and the burning question of financial emigration, with SARS recently providing more clarity thereon. It will also outline planning and strategy if you intend to return to and/or retire in South Africa. The presentation format will be informal and due to complexity and importance of these matters, it will be approximately 45 minutes. Jerry will be available afterwards for an extensive Q&A session for those who need more detailed information.

He will be joined by Marisa Jacobs, who heads-up the largest independent work permit practice in South Africa, dealing with matters ranging from the largest critical skills survey in South Africa, passport renewal, retention of South Africa citizenship etc.

KEY AREAS OF THE PRESENTATION:

  • The submission to Parliament in 2017 on behalf of South Africa expatriates, the amended tax law and planning;
  • Strategies for future dealing with South African assets, investments, family remaining and returning and / or retiring to South Africa;
  • South Africa / United Kingdom Double Tax Agreement – planning and compliance;
  • Inheritances from family in South Africa, donations’ tax, forex and exchange control planning for inward and outward remittances;
  • Strategies for doing business into South Africa, including caveats on South African rental properties and income;
  • LexisNexis guide on Expatriate Tax; and
  • Dealing with concerns surrounding South African citizenship, residency and retaining of your South African passport.

For more information or questions, please contact Dr Dylan Price on dylan@taxconsulting.co.za.

We look forward to seeing you there!

Jerry Botha
Managing Partner at Tax Consulting South Africa

Jerry Botha was the tax technical advisor to the Expatriate Petition Group, who argued against the complete repeal of the expatriate tax exemption in Parliament, resulting in a partial win with the R1m threshold introduction in 2017. TCSA is the largest fully independent tax practice in South Africa with over 90 talented professionals, with their tax technical expertise and ongoing relationship with the expatriate community resulting in the firm being approach by LexisNexis to author the first ever publication on Expatriate Tax.

The publication titled, Expatriate Tax: South Africans Citizens Working Abroad and Foreigners in South Africa, was released in October 2019 and is described by Judge DM Davis, Chairman of the Davis Tax Committee, as “a carefully considered book … dealing with the various tax implications of immigration/emigration … and will doubtless be essential reading…”.

Their professionals deal with all areas of South African taxation including rebutting overly conservative external audit findings, SARS rulings, SARS disputes and litigation, SARS refunds and holding SARS to account for interest on delayed refunds, tax due diligences, Voluntary Disclosure Programme applications, fixing heritage tax matters left in disarray by previous tax advisors, as well as the normal consulting and compliance services on corporate taxes, executive and employee taxes, high net worth families and businesses, international expansion or foreign groups into South Africa, VAT, customs and excise, and tax administrative law.

Top 10 visa-free travel destination for South Africans

NEWS | VISA FREE COUNTRIES FOR SOUTH AFRICANS

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TOP 10 VISA-FREE TRAVEL DESTINATIONS FOR SOUTH AFRICANS

South African passport holders can travel visa-free to over 100 countries, ranked the 53rd most powerful passport.

According to Home Affairs Minister Dr Aaron Motsoaledi, it is time for the UK to reconsider allowing visa-free access to South African passport holders again. “We have improved, and we think the UK should reconsider,” he says.

Several changes have been put in place by The Department of Home Affairs to improve our visa regime. Some successes on the back hereof include waiving visas for Qatar, Saudi Arabia, UAE and New Zealand. Simplified visa requirements for countries such as China and India, as well as improved passport security.

Here is a list of 10 visa-free destinations that you can travel to with your South African passport, saving you money and time.

Indonesia

1. Indonesia:

Volcanoes, Beaches, Temples and Food.

Hong Kong

2. Hong Kong:

Vibrant Atmosphere and Endless Skyscrapers

Argentina

3. Argentina:

Art, Culture and Tango

Barbados

4. Barbados:

Adventurous Activities

Peru

5. Peru:

Ancient Ruins

Ireland

6. Ireland:

Festivals and some of the Oldest Pubs

Russian Federation

7. Russian Frederation:

Rich History Embedded in Architecture

Israel

8. Israel:

Diverse Landscape and Culture

Chile

9. Chile:

Authentic Sense and Wine

Mauritius

10. Mauritius:

Tropical Climate with Warm Weather Year-round

If these aren’t compelling enough, as of January 2019, South Africans can travel to over a hundred countries without applying for a visa before your trip, browse the vast options and take advantage. Click here to view the full list of countries