The bid by billionaire IT entrepreneur Mark Shuttleworth to set aside a 10% levy on his export of R2.5billion from South Africa was dismissed on Constitutional Hill in Johannesburg today.
Shuttleworth (who flew as an astronaut in a Soyuz flight a decade ago) emigrated to the Isle of Man in 2008, giving as one of his reasons his aversion to exchange control regimes. He was permitted under the dispensation then applied by South Africa's Reserve Bank to export his entire capital, but as against payment of a standard 10% exit charge. The measure had been introduced in the Budget Speech in Parliament in 2003.
Shuttleworth contended that the charge was in fact a tax, and that its imposition flouted the constitutional requirements for any tax only to be imposed by Parliament itself by way of a money Bill. The Reserve Bank (South Africa's Central Bank) countered that the dominant purpose of the levy was not revenue-raising but to discourage sharp capital outflows and curb volatility in the Rand.
In addition Shuttleworth mounted an array of procedural attacks on the imposition of the levy, and attacked the constittuionality of the exchange control scheme as a whole.
Reversing in part the Supreme Court of Appeal (which had dismissed the challenge to exchange control but set aside the exit levy), the Constitutional Court upheld in all respects the appeal by the Reserve Bank and dismissed in its entirety Shuttleworth's cross-appeal. Constitutional dispensations elsewhere regarding taxation were closely examined. Eight members of the Court joined Deputy Chief Justice Moseneke in his judgment. Froneman J delivered a dissent.
Jeremy Gauntlett SC of Brick Court Chambers led for the South African Reserve Bank.