South Africa

South Africa losing young, skilled taxpayers

Skilled South Africans are flooding out of the country to destinations like the United Kingdom, Australia, New Zealand, and the United States.

The South African Revenue Service’s (SARS’s) latest tax data shows that thousands of South Africans have ended their tax residency.

Since 2017, more than 40,500 taxpayers indicated that they ceased to be tax residents of South Africa. However, it does not paint the full picture of the skills migration.

Frank Blackmore, the lead economist at KPMG, explained that no government department officially tracks emigration from South Africa.

It means that far more skilled professionals left South Africa than the 40,500 taxpayers who changed their tax residency.

It is also no longer wealthy taxpayers who make up the bulk of South Africans leaving in search of a better future elsewhere.

Blackmore said only 2,700 of the 40,500 South African citizens who ceased to be tax residents earn more than R500,000 annually. Only 1,100 earn over R1 million per year.

“It shows that the majority of people who left South Africa are young people who earn less than R500,000 per year,” he said.

They are mostly young professionals starting to enter the work market and build a career and life in South Africa.

However, slow economic growth, load-shedding, crime, and political uncertainty make them look for greener pastures overseas.

Frank Blackmore
Frank Blackmore, the lead economist at KPMG

Losing these young, skilled professionals is tremendously damaging to South Africa and the local economy.

Besides billions in lost tax revenue, the country will not benefit from the long careers ahead of them and their investments in the economy.

These talented people are now helping to grow other countries’ economies, including the United Kingdom, Australia, New Zealand, and the United States.

These countries have policies to attract talented young professionals, which shows how valuable they are.

Blackmore blamed the government’s mismanagement of the economy and taxpayers’ money for many people leaving South Africa.

South African taxpayers have two big options to protest the government wasting money – vote them out of power or leave.

As taxpayers are in the minority in South Africa, many people don’t believe their vote will be enough to affect change. As such, they opt to leave.

“Until the government manages taxpayer money more responsibly, you will see more young people emigrating,” he said.


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