Treasury Withdraws Foreign Pension Tax Proposal — For Now
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In a significant policy reversal, National Treasury has withdrawn its proposal to repeal the tax exemption on foreign pensions received by South African tax residents. The move follows strong public opposition and warnings from tax experts about the potential financial and economic fallout.
The now-shelved amendment, included in the draft 2025 Taxation Laws Amendment Bill, sought to remove the provision that has allowed South Africans to receive foreign pension income without being taxed locally.
During a virtual meeting of the Standing Committee on Finance this week National Treasury’s Deputy Director-General confirmed the decision , stating that the department would embark on a more consultative process before considering any future changes.
Industry concerns were clear:
The repeal would disrupt retirement planning for many who had relied on the exemption for decades.
It risked deterring returning expatriates and foreign retirees, both of whom contribute to investment and economic activity.
It could have negatively affected South Africa’s attractiveness to global investors and skilled professionals.
Treasury maintains that its concerns over double non-taxation — where neither the foreign jurisdiction nor South Africa collects tax — remain valid. However, it now plans to engage with stakeholders to find a balanced solution that protects South Africa’s tax base while safeguarding retiree stability.
🧭 The issue is far from settled — but for now, foreign pension income remains exempt. Accountants and financial planners should stay informed as consultations unfold.
Source articles: Business Tech, Polity
