South Africa has officially passed its digital nomad visa regulations into law. This move by the African country means that it would have to start issuing digital nomad visas, which brings concerning opinions among the citizens.
Earlier in February, the South African government published the draft regulation, asking the public for comments and feedback, which will be utilized when drafting the visa.
Noticeably, the draft regulations and the official piece are identical, exposing that the government did not consider public opinion.
According to some South Africans, the digital nomad visa would benefit the country by attracting foreign investments and talents, while building its tech ecosystem. Meanwhile, others project a rise in the cost of living because of an influx of immigrants.
In addition, there are concerns about the growth of inequality and tax leakage, which will affect the nation on a different level.
Consequently, the digital nomad visa will bring about necessary amendments to the nation’s legislature, if it is to become law.
Firstly, the digital nomad bill proposes an income tax exemption for foreign employees working for less than six months in the country. The Income Tax Act would have to be amended to enable the exemption to become legal.
Another obstacle is the proposed tax administration bill introduced by South Africa’s Revenue Service in 2023. According to the proposed amendments, employers of South Africa-based remote workers must deduct pay-as-you-earn (PAYE) tax. The bill states that foreign companies must apply for and receive a SARS income tax number and register a branch company within South Africa.
These are just a few of the mounting issues against the digital nomad visa bill, which is now official. All one can do is watch how the South African Government plans to traverse through these ignored challenges as applications start flooding in.
