PBA4801
Assignment 1 2025
QUESTION 1: Minister’s Position on Fairness in Taxation (25 Marks)
The Minister’s stance on taxation in relation to the remote-working visa must be
assessed against the principles of fairness in taxation, which include equity, neutrality,
certainty, and administrative efficiency.
1. Equity: The principle of equity in taxation states that individuals in similar
economic situations should bear similar tax burdens. The proposed visa
regulation, which initially allowed foreign remote workers to stay in South Africa
for up to six months without paying taxes provided they earned at least R1 million
annually, raises fairness concerns. This provision creates a disparity between
domestic taxpayers and foreign remote workers, as local professionals in the
same income bracket are subject to taxation. Such a policy may be perceived as
inequitable, undermining the fundamental principle of tax fairness.
2. Neutrality: Tax policies should not distort economic decision-making. By
allowing foreign remote workers to enjoy tax-free status while local professionals
remain taxed, the policy may inadvertently incentivize companies to favor hiring
foreign remote workers over local talent, thereby distorting labor market
dynamics. This could negatively impact South African professionals seeking
similar opportunities and contradict the goal of fostering local employment and
economic growth.
3. Certainty and Transparency: A clear and predictable tax system is essential for
attracting foreign professionals. The delay in implementing the visa due to tax-
related issues indicates a lack of certainty in the regulatory framework. This
uncertainty may deter potential digital nomads from choosing South Africa as
their work base, thereby limiting the intended economic benefits of the program.
Assignment 1 2025
QUESTION 1: Minister’s Position on Fairness in Taxation (25 Marks)
The Minister’s stance on taxation in relation to the remote-working visa must be
assessed against the principles of fairness in taxation, which include equity, neutrality,
certainty, and administrative efficiency.
1. Equity: The principle of equity in taxation states that individuals in similar
economic situations should bear similar tax burdens. The proposed visa
regulation, which initially allowed foreign remote workers to stay in South Africa
for up to six months without paying taxes provided they earned at least R1 million
annually, raises fairness concerns. This provision creates a disparity between
domestic taxpayers and foreign remote workers, as local professionals in the
same income bracket are subject to taxation. Such a policy may be perceived as
inequitable, undermining the fundamental principle of tax fairness.
2. Neutrality: Tax policies should not distort economic decision-making. By
allowing foreign remote workers to enjoy tax-free status while local professionals
remain taxed, the policy may inadvertently incentivize companies to favor hiring
foreign remote workers over local talent, thereby distorting labor market
dynamics. This could negatively impact South African professionals seeking
similar opportunities and contradict the goal of fostering local employment and
economic growth.
3. Certainty and Transparency: A clear and predictable tax system is essential for
attracting foreign professionals. The delay in implementing the visa due to tax-
related issues indicates a lack of certainty in the regulatory framework. This
uncertainty may deter potential digital nomads from choosing South Africa as
their work base, thereby limiting the intended economic benefits of the program.
