The Omicron strain hits the news headlines in Pretoria. AP
The Omicron strain hits the news headlines in Pretoria. AP
The Omicron strain hits the news headlines in Pretoria. AP
The Omicron strain hits the news headlines in Pretoria. AP

South Africa fears domestic damage if Omricon variant spreads


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South Africans showed frustration over international reaction to the new Covid-19 variant Omicron and the subsequent travel bans imposed with most of them calling it a “betrayal”.

That other countries where the strain had been detected were not subjected to similar measures was a contentious issue.

People braced for a not-so-jolly ‘family meeting’, as broadcasts from President Cyril Ramaphosa are called, in the run-up to the holiday season.

In the past two years, such ‘meetings’ resulted in hard lockdowns for South Africa that included being confined to home, no domestic travel expect for emergencies and a ban on alcohol sales.

Mr Ramaphosa met this weekend with the National Command Council, established to oversee the government’s reaction to the pandemic. A decision on whether more restrictions will be imposed has yet to be made.

Should another full lockdown be imposed, public anger is likely to be substantial. The grinding controls imposed on the populace were at least partly to blame for riots in July that saw mobs loot and burn hundreds of businesses in KwaZulu-Natal province, in violence that killed at least 250 people.

Mr Ramaphosa may be reluctant to pile on more local restrictions on top of international isolation.

Prominent South African academic, Adam Habib, director for the School of Oriental and African Studies at the University of London, challenged UK Health Secretary Sajid Javid to apply the same standards to all countries.

“Health Secretary Javid, now that the new Covid variant has been detected in Belgium, can we expect a flight ban on Belgium or Europe? Or are such ‘strategic’ responses reserved solely for countries on the African continent?” Mr Habib said.

Even the World Health Organisation has questioned the latest border controls. Dr Mary Stephen, technical officer at the WHO's Africa regional office in Brazzaville, Republic of the Congo, said closures do slow the spread of Covid-19 but will not stop it.

“There are other tried-and-tested methods, such as countries that require testing before travel, and many also require testing on arrival,” Dr Stephen said.

Instead, countries should be commending South Africa for making the information known as quickly as possible, she said.

“What we need at this time is solidarity to recognise the early reporting of this variant, not the closure of borders against South Africa and other southern African countries," she said. "We are all in this together.”

Economic concerns

The near total global travel ban that came after last week’s announcement of the new variant added to the likelihood of another full lockdown and threatened to swamp a fragile economic recovery.

By this weekend, foreign citizens and residents working abroad scrambled to find flights out of the country. The timing of the border shutdowns could hardly be worse. This is the time of year South Africa's tourism sector – that counts towards nearly 10 per cent of gross domestic product – prepares for high season.

About 300,000 visitors arrive from Britain alone over a three-month period from December to February, South African government statistics show, spending as much as 10 billion rand ($610 million) during their stay.

The loss of foreign arrivals over the crucial peak season of Christmas and New Year would devastate an industry already on its knees after repeated lockdowns over the past two years.

Tourism officials had hustled over the past year to try revive the industry, reaching out to international trade counterparts and attending virtual travel expositions, said acting chief executive of South African Tourism, Sthembiso Dlamini.

“Our efforts were just starting to pay off, with an increase in bookings. We also saw more flights into the country and more airline partnerships on South African routes.”

Caught by surprise

The suddenness of the border closures appeared to have caught the authorities by surprise.

Foreign Minister Naledi Pandor described the decision as “rushed” and said she would engage with the UK government as well as others that had placed travel bans on the country.

"Our immediate concern is the damage that this decision will cause to both the tourism industries and businesses of both countries," she said.

“We should at least allow for domestic tourism to continue. This will be a chance for people to get out and see this beautiful country of ours.”

  • The UAE has suspended entry to travellers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique over concerns about the Omicron coronavirus variant. Khushnum Bhandari / The National
    The UAE has suspended entry to travellers from South Africa, Namibia, Lesotho, Eswatini, Zimbabwe, Botswana and Mozambique over concerns about the Omicron coronavirus variant. Khushnum Bhandari / The National
  • Oman has suspended entry to travellers from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini from November 28. Getty
    Oman has suspended entry to travellers from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini from November 28. Getty
  • All foreign citizens will be stopped from entering Israel for 14 days from November 27. AFP
    All foreign citizens will be stopped from entering Israel for 14 days from November 27. AFP
  • Jordan's Interior Ministry has announced an entry ban on non-Jordanian travellers coming from South Africa, Botswana, Namibia, Zimbabwe, Mozambique, Lesotho and Eswatini. Alamy
    Jordan's Interior Ministry has announced an entry ban on non-Jordanian travellers coming from South Africa, Botswana, Namibia, Zimbabwe, Mozambique, Lesotho and Eswatini. Alamy
  • Kuwait is to suspend direct flights from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho, Eswatini, Zambia and Malawi from Sunday. Photo: Four Seasons Hotel Kuwait
    Kuwait is to suspend direct flights from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho, Eswatini, Zambia and Malawi from Sunday. Photo: Four Seasons Hotel Kuwait
  • Qatar Airways said on November 27 it had banned entry to travellers from South Africa, Zimbabwe and Mozambique. AFP
    Qatar Airways said on November 27 it had banned entry to travellers from South Africa, Zimbabwe and Mozambique. AFP
  • Saudi Arabia suspended flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini on November 26. Reuters
    Saudi Arabia suspended flights to and from South Africa, Namibia, Botswana, Zimbabwe, Mozambique, Lesotho and Eswatini on November 26. Reuters

“We had just come off the UK’s red list and now we are back on it again, when people have already booked to come here,” said Bonang Mohale, president of Business Unity South Africa, the country’s largest chamber of commerce.

Even before Covid-19 struck in early 2020, South Africa was struggling with record high unemployment, had just been relegated to junk status by ratings agencies and was suffering rolling power cuts that hampered life for all its citizens, Mr Mohale said.

For many people, their personal circumstances worsened during the pandemic. A survey published last year showed that during the height of the coronavirus lockdowns in May and June, 2020, that one in four South African households reported going hungry and were unable to purchase enough food.

“When the pandemic found us, we were already at our lowest ebb,” Mr Mohale said. “Frankly, the economy cannot afford another lockdown. Ten times more people will be killed by hunger than by the virus.”

Our family matters legal consultant

Name: Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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Why it pays to compare

A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.

Route 1: bank transfer

The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.

Total cost: Dh567.25 - around 2.9 per cent of the total amount

Total received: €4,670.30 

Route 2: online platform

The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.

Total cost: Dh74.10, around 0.4 per cent of the transaction

Total received: €4,756

The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

The specs: Aston Martin DB11 V8 vs Ferrari GTC4Lusso T

Price, base: Dh840,000; Dh120,000

Engine: 4.0L V8 twin-turbo; 3.9L V8 turbo

Transmission: Eight-speed automatic; seven-speed automatic

Power: 509hp @ 6,000rpm; 601hp @ 7,500rpm

Torque: 695Nm @ 2,000rpm; 760Nm @ 3,000rpm

Fuel economy, combined: 9.9L / 100km; 11.6L / 100km

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What can you do?

Document everything immediately; including dates, times, locations and witnesses

Seek professional advice from a legal expert

You can report an incident to HR or an immediate supervisor

You can use the Ministry of Human Resources and Emiratisation’s dedicated hotline

In criminal cases, you can contact the police for additional support

At a glance

Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.

 

Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year

 

Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month

 

Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30 

 

Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse

 

Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth

 

Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances

Updated: November 28, 2021, 5:09 PM