Since the increasing availability of Information and Communications Technologies (ICTs) over the past decade, as well as due to the COVID-19 pandemic, remote working has become more prominent throughout the world. It has given employees and businesses great flexibility on how they conduct their everyday business, improved productivity as well as having shown many that physical offices are no longer necessary or can at least be downscaled to decrease costs. However, since the increase in remote working, there has been an evident increase in technostress experienced by those working remotely.
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President Cyril Ramaphosa announced several emergency tax relief measures in response to the continuing Covid-19 pandemic and recent unrest that are aimed at helping affected and tax compliant businesses to recover and ensure livelihoods for employees.
The South African Special Risks Insurance Association (SASRIA) will form a key part of the intervention to help insured businesses restore their operations. Together with reinsurers, SASRIA has already begun its claim administration process. Pay-outs will be provided to all covered businesses. Crucially, government has decided to provide full financial backing to SASRIA should it exceed its solvency limits. The National Treasury is putting in place the necessary arrangements to ensure that this commitment is met should it be needed.
Since the beginning of the COVID-19 pandemic, governments have put their countries into lockdowns – forcing businesses to adapt and work remotely. This sudden surge in internet usage has also seen a large increase in cyber-attacks, according to Mimecast’s 2020 state of email security report. The report showed that 61% of companies suffered from a ransomware attack, a 64% increase in email threats and a total of 79% of organizations were negatively affected due to their lack of cyber preparedness.
The recent ruling by the Constitutional Court sentencing Jacob Zuma to 15 months jail time can only be hailed as a victory for democracy and a booster for the South African economy. If one of the most powerful men in South Africa can be held accountable for their actions, then beware those who have been living off graft and corruption for the last decade.
The economic effects of the coronavirus crisis have been extensive in South Africa (SA) and a recovery to pre-pandemic levels will take several years. While it is forecast that the SA economy will recover marginally in 2021, it is likely to be uneven and subdued.
(ICTs), have shown to be major contributors to the effectiveness of many different businesses throughout the world and are constantly changing the way people and industries operate. ICTs can be defined as an array of technologies that are designed to collect, store, process and communicate information both internally as well as externally of an organization. This makes ICTs quite a broad category of technologies but some of the most common examples are cloud computing, mobile apps, networked environments and even the Internet!
Filing season starts on the 1st of July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July. SARS will send you an SMS if you are selected to be auto-assessed. SARS will auto-assess based on the data received from employers, financial institutions, medical schemes, retirement annuity fund administrators and other 3rd party data providers. If you accept your auto-assessment, any under or overpayment of tax will be processed as normal. If you want to edit your return, you can file your return on eFiling or the SARS MobiApp or alternatively contact us for professional assistance in this regards.
Any person travelling in or out of the Republic of South Africa should unreservedly declare:
Filing Season 2021 for employers, during which they must file the annual Employer Reconciliation Declaration (EMP501), opens on 1 April 2021 and closes on 31 May 2021. The EMP501 must reflect accurate payroll information about their employees, employees’ tax (PAYE) payments made and Tax Certificates (IRP5/IT3) (a)s generated, covering the full tax year from 1 March 2020 to 28 February 2021.
The general provisions under POPIA will apply equally to any personal information processed by an employer as part of an employee’s employment, and all employers have until 1 July 2021 to ensure that their workplaces are fully POPIA compliant.
The COVID-19 pandemic has had a severe impact on tax revenue collection. Given large predicted shortfalls in revenue for 2020/21 and over the next three years, the 2020 Medium Term Budget Policy Statement (MTBPS) confirmed that tax increases totalling R40 billion would be required over the next four years to help stabilise public debt and return the public finances to a sustainable position. These increases were first announced in the June 2020 special adjustments budget.
Government is reducing the number of tax incentives, expenditure deductions and assessed loss offsets, with the aim of lowering the corporate income tax rate over the medium term. These changes are expected to enhance efficiency, transparency and fairness in the business tax system, while facilitating economic growth through improved investment and competitiveness.
Personal income tax accounts for about 40 per cent of total tax revenue. In response to extreme levels of inequality, South Africa’s rate structure is highly progressive and covers tax residents’ worldwide income. South Africa has the highest personal income tax share among upper middle-income countries, alongside one of the highest top personal income tax rates.
The sustainability of the public finances will depend heavily on government’s ability to reduce growth in the public-service wage bill. Compensation accounted for about 34 per cent of consolidated spending in 2019/20. Between 2006/07 and 2019/20, compensation was one of the fastest-growing spending items, increasing faster than GDP growth. As outlined in previous editions of the Budget Review and MTBPS, by 2019/20 rising compensation spending had become unaffordable and was the main expenditure risk to the sustainability of the public finances. At the general government level (which includes municipalities), South Africa’s wage bill as a share of output is approximately 5 percentage points higher than the Organisation for Economic Co-operation and Development average – and on par with Iceland and Denmark.
Tito Mboweni’s big day looms next week, with little progress on the medium-term budget policy speech. The biggest issue relates to the freeze on government wages to which there has been no resolution yet. Let’s hope that we get finality in the upcoming budget.
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The digital landscape is constantly evolving, and as more emerging technologies gain traction, more and more opportunities become available to businesses that need to be utilized otherwise they risk falling behind – especially now that we are living in a vastly different “New Normal”. It is now harder for businesses to only rely on word of mouth or the use of bulk emailing to keep their clients informed and must utilize all digital platforms in order to thrive.
Probably the most memorable thing outgoing US President Trump had to say about Africa was his brash comparison of the continent to a toilet. Like many things he said, it was uninformed and unfiltered. True to his campaign promises, Trump has been inward focussed and has played to his grass-roots support. His “America First” stance has been the one thing about which he has been totally consistent.
All over the world, but most markedly in emerging markets, one of the trends linked to the pandemic has been the rapid growth of digitisation.