Author: Ferdie Schneider, National Head: Tax, BDO South Africa Since the outset of the new democracy, South Africa used its tax resources to expand social assistance and increase spending on education and health services thereby reducing poverty. Achieving greater income equality has however, remained a challenge. Household consumption inequality, measured by the Gini coefficient, increased from 0.67 in 1993 to 0.69 in 2011, which is among the highest in the world. This potentially ranks South Africa as one of the most unequal countries amongst middle-income countries.
Author: Nyasha Musviba
SARS: THE 2015 Employer Annual Reconciliation
1 April is the start of the 2015 Employer Annual Reconciliation for the period 1 March 2014 to 28 February 2015. Don’t forget the following important details: Top Tip: Submission may only be sent from 1 April 2015 for the 201502 period. 1. The Employer Annual Reconciliation period is from 1 April – 29 May 2015. Get ahead and submit your reconciliation sooner, rather than later. This will give you time to resolve any discrepancies before the deadline.
SARS Preliminary Outcomes of Revenue Collection for the 2014-2015 Fiscal Year
We are today releasing SARS’ preliminary revenue collection outcome, twelve hours after the close of the 2014/15 fiscal year. Despite challenging economic conditions, SARS collected R986.4 billion which is a 9.6 % growth in total revenue from 2013/14. This is R7.4 billion above the revised estimate announced in the February 2015 Budget. This revenue performance was made possible by an extraordinary drive by SARS on compliance improvement, which in aggregate, added about R22bn. This closing of the compliance gap compensated for revenue collection shortfall caused by a slowing economy.
Rethinking retirement – when must employees retire?
The question often arises as to when employees should retire and when employers can compel such employees to retire. There is no statutory retirement age applicable to all employees. The retirement age should be agreed between the parties. Where there is no agreed retirement age, an employer may retire an employee who has reached the retirement age that is the norm. Parties normally agree in the employment contract on a retirement ages or often agree that the retirement age will be as per a company policy or the rules or a retirement fund.
Sars accuses Malema of lying, hits him with R14m bill – report
Pretoria – The SA Revenue Service (Sars) has accused Economic Freedom Fighters leader Julius Malema of lying about his source of income and hit him with an additional R14m tax bill, the Sunday Times reported. This was according to court papers filed in the North Gauteng High Court by Sars which has launched an application for Malema’s final sequestration. According to the report, Sars, in the court papers explaining why it had dumped its deal with Malema, said he had lied about the source of the funds used to settle part of his tax bill.
Seize opportunity to improve mining tax, pleads KPMG’s Saloojee
South Africa should seize the current timely opportunity to amend its mining taxation in a manner that encourages foreign investment, stimulates prospecting, gets mining companies to start dealing with marginal mines and gives enough back to the fiscus for the benefit of this country’s people, KPMG corporate tax head Muhammad Saloojee pleaded on Tuesday. “That’s the model we’ve got to start working on, bringing all those factors into account,” said Saloojee, who spoke to Creamer Media’s Mining Weekly Online on the sidelines of the 2015 Breakfast Conversation, which was staged as a prelude to the upcoming Junior Indaba, in Johannesburg, on June 3 and 4.
The obligation to pay severance pay to fixed-term employees
The amendments to the Labour Relations Act, No 66 of 1995 (LRA), ushered in an era of greater protection for employees on fixed-term contracts where the employees earn below the earnings threshold (currently R205,433.30) published annually in terms of the Basic Conditions of Employment Act, No 75 of 1997 (BCEA). Amongst the advantages offered to fixed-term contract workers receiving a salary of less than R205,433.30 per year is the fact that, under some circumstances, they may now also lay claim to a new statutory payment at the conclusion of a fixed-term contract.
What’s good for the goose…
In the recent judgement by a full bench of the Western Cape High Court, in the matter of ABC (Pty) Ltd v the Commissioner for the South African Revenue Service (6 February 2015), the South African Revenue Service (SARS) was reminded that, what’s good for the goose, is good for the gander. The taxpayer, being a vendor for purposes of value-added tax (VAT), staged annual international jazz festivals in Cape Town. In the course of that enterprise it concluded sponsorship agreements with South African Airways, the City of Cape Town, the SABC and Telkom (Sponsors).
UIF relief for taxpayers
On 25 February 2015, the Minister of Finance, Nhlanhla Nene, delivered the 2015 Budget Speech (Budget Speech) which contained a number of tax proposals. One such proposal relates to the temporary reduction in contributions to the Unemployment Insurance Fund (UIF) for the 2015/16 financial year. By way of background, the UIF gives short-term relief to workers when they become unemployed or are unable to work due to maternity, adoption leave or illness. The unemployment insurance
Withholding Tax on Interest
SARS recently issued a summary of the Withholding Tax on Interest (WTI) which mainly addresses practical issues relating to WTI. The WTI came into effect on 1 March 2015 (in respect of interest that is paid or that becomes due and payable from that date). We summarise the most salient points further on in this article. The summary is not intended to be comprehensive and does not deal with some of the complex technical issues contained in the WTI provisions.