Here’s a shocker: 

Australia’s “Unrealised Capital Gains Tax” now taxes unrealised gains on pension funds, which could potentially force investors into asset sales (simply to afford the taxes on profits that have not really been made).

France’s proposed “Targeted Universal Tax” means if you leave France for a lower tax jurisdiction then you must continue paying tax as though you were in France.

Netherlands’ proposed “five year exit tax” means if you leave you must pay Dutch tax on your income and capital gains for the next five years.

It’s a sign of “peak taxation”. When things get desperate, governments look under every rock for additional tax revenue and it is simply too tempting to look at all these unrealised gains in pension and other investment funds and tax them.

Americans already tax their citizens on global income, and it would not stretch credulity to argue that other countries will start applying the same rules because the US does it. And this will likely happen within the next 25 years, according to the Listed Reserve.

Discussions around taxing unrealised capital gains have gained traction in the US, particularly with proposals from some political figures to include high-net-worth individuals' paper gains in annual tax assessments. While not yet law, this mirrors Australia's approach and could force asset sales to cover tax liabilities, especially for illiquid assets like real estate or private equity.

Germany imposes an exit tax on individuals relocating to lower-tax jurisdictions, taxing unrealized gains on significant shareholdings or business assets at the time of departure. 

Spain, Norway, Belgium and Sweden all already have variations of France’s proposed exit tax.

Meanwhile, every few days we read some alarming news about which segment of the population is next in SA Revenue’s cross-hairs. Here’s a sample: 

“Retired South Africans who contributed to a foreign retirement product while working abroad in the past are facing a higher tax burden – and potentially even double taxation – from next year.”

Here’s another:

Foreign pensions are now under attack from Sars. The tax proposal that could drive skilled professionals and retirees away.

It’s all pretty dire and tedious.

Here’s a prediction: this kind of tax grab is equivalent to hostage taking and it’s going to lead to disobedience and hiding of assets. Those who saw this coming have already secreted the family jewels away from the clutches of the tax collectors. 

Things only change when there is mass civil disobedience. These drastic moves by bankrupt governments are a sign of desperate times. The Laffer Curve principle suggests there is only so much revenue governments will vacuum up this way. Capital will move – however it can – to less hostile jurisdictions and there will always be a few pockets of relative freedom in the world.

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