2015-06-10
Some timely updates on topics we have covered previously -
In his February Budget speech, the Minister of Finance announced a one year reduction in UIF (Unemployment Insurance Fund) payments from a monthly maximum of R148.92 individual deduction to R10 per individual. This was to reduce the R72 billion surplus sitting in the fund. This would have put R15 billion back into consumers' and businesses' pockets (the employer matches the individual's contribution to UIF).
The proposal has been withdrawn, at least for the moment, "to allow more time for consultation".
This is a pity as a UIF tax holiday would have helped counteract the impact of the income tax increase also announced in the February speech.
The Department of Trade and Industry (DTI) released new sector codes early in May. Although a detailed handbook of how to implement the codes is still outstanding, there were some welcome clarifications such as businesses with existing scorecards can keep these to 30 October 2015.
What was surprising was the DTI clarification concerning the ownership element. This downgraded employee and broad based ownership schemes - out of 25 points, broad based schemes could, per the proposal, only claim 3 points. As approximately 80% of BEE deals have been done on this basis, this created confusion and anger from business. DTI then issued a further clarification saying that existing BEE deals would not be affected and would still get maximum points. It also said a task team had been set up to give recommendations to the Minister within the next 30 days.
Then on 15 May, the DTI withdrew this notice altogether, with the end result that broad based ownership will no longer be penalised as was proposed. No mention is made of the task team in the withdrawal notice.
What seems to be driving the DTI's thinking is the idea that moving to individual equity ownership will give more meaningful participation to black shareholders. The DTI also see broad based ownership programs as a potential vehicle for fronting.
Companies should carefully consider this new thinking and seek advice if in doubt, as it could have serious ramifications for your business.
With much fanfare SARS announced recently that it had exceeded its 2014-2015 collection targets by R7.4 billion. The reason for the fanfare was SARS has had bad press of late - resignations of key officials, investigation of a rogue spy unit set up by SARS - and pundits were predicting that SARS would not be able to keep up its high performance standards.
This should be put in context -
The government is committed to its social welfare programmes but is going to find it difficult to fund them out of an under-pressure revenue base. It is unlikely that VAT will be raised and other indirect taxes such as the fuel levy have already been substantially increased.
That leaves personal income tax and it looks more and more likely that there will be more income tax increases.
In the first quarter of 2015, the number of cyber-attacks doubled over 2014. The message is clear - cyber criminals are getting more sophisticated (for example, one of their new weapons resides in your hardware which makes traditional anti-virus techniques ineffective) and are stepping up their activities.
Research has also shown how seldom people change passwords and how many people use the same password for their applications. Worse still, 43% of us don't place much value in passwords. We are making it easier for cyber criminals to access our data.
Remember that everyone - from banks to businesses to individuals - is considered to be fair game by the hackers.