Millionaire exodus: ‘Riots a factor’, as more high-earners set to ditch SA

Good luck to our Treasury in the years ahead – because you’re going to have much less money in the coffers. Data released by Reuters on Wednesday shows that millionaires, high-earners, and the biggest tax contributors in South Africa are taking their money and livelihoods elsewhere – with one emigration company pointing a finger at the recent riots.

More millionaires deciding to leave South Africa

The ill-effects of the pandemic and near-constant schedules of load shedding remain the biggest reasons behind emigration enquiries, but it seems this latest spate of widespread violence is now filtering into the decision-making process.

According to the research, South Africa stands to lose over R20 billion in tax revenue this year, as a direct result of ‘millionaire emigration’. Last year, nearly 2 000 citizens in the very top wealth brackets jumped ship, electing to take their tax contributions elsewhere. The concerning numbers speak for themselves…

The trouble with taxes: Moving millionaires to cost SA dearly

• This year, tax revenue from the three highest brackets will fall by 8%, or around R22.6 billion ($1.58 billion).
• The number of taxpayers earning R1.5 million or more will shrink by 9.6% for this financial year.
• The R1 million to R1.5 million bracket is expected to decrease by 13%.
• Meanwhile, the R750 000 to R1 million bracket is forecast to contract by 1.1%.
• South Africa lost 1 900 high net worth individuals (HNWIs) – worth $1 million / R14.3 million or more – in 2020.
• Mzansi is now home to the fewest HNWIs it’s had since 2008.
• Almost 10 000 companies voluntarily de-registered in SA last year, up a whopping 10% from 2019
• It’s estimated that, for every affluent emigrating person, South Africa loses nearly R1.2 million in income tax

Recent riots ‘starting to influence decisions’

Beaver Immigration, which specialises in emigration to Canada, noted a significant uptick in South African enquiries this year. Those with businesses are now looking to register them as part of their move, and we may now be seeing the wider impact of the July riots on people who are weighing up a new life overseas.

• Nicholas Avramis explains that a high number of entrepreneurs are now seriously considering emigration from SA

“We’ve had more people applying to buy new businesses in Canada, or they apply through something called the start-up visa programme that is desgined to attract entrepreneurs. [The recent riots] and unrest has since led to a massive spike in inquiries from businesses looking to emigrate.”