I remember, as a kid, reading about Doctor Dolittle and the fantastic “pushmi-pullyu” a gazelle-unicorn cross with two heads (one of each) at opposite ends of its body. Whenever it tried to move, both heads went in opposite directions and as a result it went nowhere.
I had to apply for a tax clearance for foreign investment for a client of mine and could not help but think how the current tax clearance process reminded me of the mythical animal. On the one head Pravin Gordhan has announced significant relaxation to exchange controls which should make it easier for South Africans to invest offshore. On the other head, however, is SARS – seems that no one has informed them of the intention to allow South Africans to invest offshore more freely. The whole tax clearance application process is far too complicated, time consuming and inconsistent. It seems as if they are intent on making it as difficult as is possible and so it would appear that SARS is pulling in the opposite direction from Treasury.
We eventually got the certificate but after quite a bit of time (more than 3 weeks) quite a few phone calls and 2 visits to the SARS branch…and this during a time when hardly anyone wants to invest offshore.
It is an excellent time to take money offshore – but don’t expect to do it in a hurry if you don’t have tax clearance and so my advice is that if you think you might be investing sometime in the next year, apply for tax clearance. The certificate is valid for 12 months and you don’t have to use it immediately. Don’t wait for the rand to weaken and try to apply in the rush – it will be too late!
