sami - Posthaven

Home Affairs visa backlog ballooning due to increase in notarial contracts

Motsoaledi was speaking at a media briefing in Hatfield, Pretoria, yesterday on the amended immigration regulations, over which he said there seemed to be some misunderstanding.He said as a result of the confusion, the department would be withdrawing the gazetted amendments to clear up the misconceptions and re-gazette them as early as next week.The minister admitted that his department was experiencing a backlog surrounding dependants, spouses and relatives’ visas being sought by foreign nationals who had been approved to come into the country after successfully obtaining employment.
He said in most cases while the approvals were easily obtained, they,= however, did not include spouses and dependants, which many were decrying as they were not willing to be separated from their families.
Despite understanding this need, Motsoaledi said there was a situation which allowed foreign nationals to obtain a spousal visa should they marry a South African citizen, which was causing a problem for the department.

With this loophole, he said they were finding that, in many cases, spouses that did not exist were being created through notarial contracts simply to obtain visas.

“Through the notarial contracts you come with a partner, and go to the notary general to write you a contract stating that you are staying together as partners and when you bring that to Home Affairs, they regard you as a spouse.“The number of notarial contracts is increasing day by day but when we send immigration officers to visit such families, they don’t find any spouse and yet we have a document that says we must issue a spousal visa,” Motsoaledi said.

The minister said what was even more alarming was the fact that the number of these kinds of contracts were growing in “leaps and bounds”, resulting in the backlog.

“This backlog is changing every day because the notarials are growing daily. Now we have a situation where immigration officers visit families for six months with no spouse in sight, so what are we to do? Unfortunately, it’s a problem we are going to have to change because it’s in the law.”

He stressed that his department usually did not experience backlogs on critical skills, general work and business visas “but people with critical skills may be complaining of delays referring to delays in obtaining spouses for their visas”.

“The only way to know that indeed we have delayed giving someone a critical skills visa is for companies to provide us with a name of the employed person, because once you appear in the gazette and give us a letter of employment from your employer we issue it (the visa) immediately.”

Motsoaledi said that while several complaints have been received from the Chamber of Business units and allegations by the media when requested to provide a list of names to verify, none were forthcoming.“The reality we face is that you might be an engineer with a PhD but if no company gives you a job in South Africa, why should we allow you to come? There must be a company that needs you and then we can come in and facilitate entry into the country.

“The change we are bringing in these amendments is to do away with the requirement of having to go to the Department of Employment and Labour and replace it with a point-based system.”

The minister said they were unable to expand more on the point-based system because it still needed to be gazetted as they wanted to hear what the public would say about the scoring or points awarded.

Vat remains a challenge for small businesses in tourism sector

Inconsistencies create uncertainty and affect competitiveness.

The industry is ‘dominated by very small companies’ that cannot afford expensive tax consulting or accounting systems needed to cope with the complexities. Image: Shutterstock
Uncertainty around the value-added tax (Vat) treatment on services offered to foreign tour operators or foreign travellers continues to plague the local tourism industry.
Inconsistencies in the approach adopted by the South African Revenue Service (Sars) and an onerous administrative burden on particularly smaller companies are making South Africa uncompetitive compared to the rest of the world.
The South African Tourism Services Association (Satsa) unpacked the practical consequences of the Vat complexities for inbound operators and the implications of a tax court decision in the so-called Ken case during a recent webinar.
The Vat Act provides for a zero rating of services when a local entity renders services or goods to a foreign entity or individual abroad. However, the lack of uniformity in the act’s applications creates uncertainty.
More clarity
The Ken case has raised hopes for more clarity and certainty. Ken, a destination management company in the tourism industry, successfully appealed against additional Vat assessments raised by Sars in the tax court. The company assisted foreign tour operators in structuring tour packages for marketing and sale to the operator’s clients, all foreign tourists.
The tax court found in favour of the company and criticised Sars for its inconsistency with its own interpretation note, which was issued around 2016.
The note sets out the common law relationship between the principal (the supplier of the service) and the agent, and the Vat consequences of the relationship.
However, the tax court decision is only binding on the two parties, namely Sars and Ken, warns Jo Roman, senior associate at ENSafrica. The case is quite fact-specific and cannot be relied on in general terms.
Hence, there is continued uncertainty for the local tourism industry offering agency services to foreign travellers and operators.
The relationship
A lot turns on the relationship between the (foreign) principal and the (local) agent. Cliff Watson, tax director at BDO, says the two terms are being used quite loosely in the industry.
The agent is the authorised representative who affects the legal relationship between the principal and third parties, such as hotels. No contractual rights and obligations are established between the agent and the third parties. The agent merely acts as the conduit to bring about the legal relationships between the principal and the suppliers.
The principal must grant the agent the necessary authority to act on their behalf. If a dispute arises, the agent relies on that authority to show that the authority existed at the time when the legal act was concluded.
Craig van Rooyen, director of Tour d’Afrique, says the industry is dominated by very small companies that really cannot afford expensive tax consulting or accounting systems to assess what is liable to Sars on every booking they make or across the chain when changes are made.
Practical consequences
He gives an example of a small local business that acts as an agent for an Italian tour operator.
The company makes the bookings on behalf of the tour operator and receives an “arranging fee”. While in SA, the foreign travellers decide to stay longer and book additional excursions. Suddenly, these services are now consumed within the country, and the agency mechanism changes from an arranging fee to effectively becoming a principal that should charge the standard Vat rate on the services.
“If you do not have a proper system in place and there is no control over your finances, it becomes difficult and expensive to manage,” Van Rooyen adds.
Cullinan Holdings group financial director David Standage says the current reality for local tourism businesses is one of continued uncertainty. Their group navigates the Vat complexities by broadly following the Australian general sales tax guidelines.
There must be an agreement with the foreign tour operator to confirm the agency relationship. Some foreign operators state in their agreement that the SA agent supplies the service. This may result in a Vat liability for the local business, hence the importance of having their own agreement.
Charles de Wet, tax executive at ENSafrica, also warns against using “boilerplate” clauses in agreements with foreign tour operators. It must be clear that the local management company is not the buyer but sourcing it on behalf of the foreign entity.
“They do not have to be complicated agreements, but they need to be specific about the service you provide and in what capacity you are providing it.”
Continued interaction
David Frost, CEO of Satsa, says the industry continues to engage with the government and Sars to work with the industry as a partner. SA must be competitive as a tourism destination.
He says the interaction between the industry and government should not be acrimonious.
“The aim is to have a clear and defined set of guidelines, such as the Australians have, that small businesses who are genuine tourism entrepreneurs can adhere to and be compliant with,” Frost adds.
International tourist arrivals from January to December 2023 totalled 8.5 million, representing a 48.9% increase when compared with the same period in 2022.

Some success for Home Affairs hiring 10,000 unemployed graduates

Myles Illidge1 April 2024

Some success for Home Affairs hiring 10,000 unemployed graduates

The Department of Home Affairs (DHA) initiative to hire 10,000 young graduates has created almost 3,700 jobs for unemployed youths since it kicked off in August 2022, with more than 260 leaving for better opportunities.

This is according to Minister Aaron Motsoaledi, who also revealed that the department had digitised nearly 31.5 million images as of 29 February 2024 in response to parliamentary questions from Democratic Alliance MP Adrian Roos.

“The advert for the first 1st 2,000 cohort of unemployed graduates was published in the 2022/23 financial year, leading to the initial employment of 1,405 graduates,” said Motsoaledi.

“This number has been decreasing due to youth finding better opportunities elsewhere. As of 31 January 2024, a total of 1,142 youth were still in the employ of the department.”

According to the DHA’s first job advert, this is precisely what the initiative aimed to achieve.

“During the tenure of the contract, the youth will receive continuous learning and development interventions to improve their skills for optimal performance and to equip them for future employment and /or entrepreneurial opportunities,” it said.

To this end, 260 of the unemployed graduates who successfully applied and worked for the DHA have already left for better opportunities.

Motsoaledi said the advert for the second round of hiring closed in March 2023. Of 439,000 applicants, 2,550 were successful.

“In December 2023, the Department issued 2,550 appointment letters to qualifying applicants,” he stated.

“This brings the total number of young graduates employed for the digitisation project close to 3,700.”

He added that the third and final cohort will be recruited in the 2024/25 financial year.

The initiative aims to employ young graduates, who will help digitise over 350 million civic paper records of birth, marriages, deaths, and amendments, most of which are in Gauteng, the North West, and the Western Cape.

“As of 29 February 2024, the department had digitised 31,419,990 images, which translates to 714,016 records. Records consist of paper records and microfilms,” Motsoaledi said.