Doing Business In South Africa ... An Overview

The South African gross domestic product (GDP) expanded by 1,9% in the first quarter of 2022, representing a second consecutive quarter of upward growth. The size of the economy is now at pre-pandemic levels, with real GDP slightly higher than what it was before the COVID-19 pandemic. The National State of Disaster was lifted as from 5 April 2022, and the rules on wearing masks indoors and the limitation on public events and gatherings were all repealed on the 23 June 2022.

N Nolands Team

IFRS News 2022

It is important for us to recap the amendments released by the IASB which have recently become effective, or are to become effective in the short-term. In addition, we should reflect on the activity of the IASB to ensure we are up-to-date as to what is currently on their agenda, which could be topical in client interactions over the upcoming months.

C Craig Stansfield

Force Majeure And Property

A general “force majeure” (or “act of God”) clause is often included in lease agreements, and in most cases, its definition is termed broadly. Such a clause will only apply in circumstances which are beyond the parties’ control, which human foresight could not have anticipated, and which make performance in terms of the contract objectively impossible.

N Nolands Team

Jacob Zuma Judgement – What could this mean for South Africa

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.

N Nolands Team

Personal Income Tax

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.

N Nolands Team

Ensuring an Affordable Public-Service Wage Bill

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.

N Nolands Team

Nolands 10th Conference – On time and online.

The Nolands annual conference this year, the tenth, was earmarked for Friday the 14th of August and this was the date it took place, only in a very different format from the previous nine.

N Nolands Team

Mandatory Compliance Checklist

The Companies and Intellectual Property Commission (CIPC) is tasked with ensuring, monitoring and enforcing compliance with the Companies Act. In pursuance of this function, the Commission issued Notice 52 of 2019 dated 13 August 2018, which came into effect from 1 January 2020. The Notice announced that a new mandatory Compliance Checklist would be required to be completed and submitted by all categories of companies (but not a Close Corporation or “CC”). The Checklist had to be submitted to the Commission before the relevant company’s Annual Return could be submitted.

N Nolands Team

Technology And Our New Normal – The Use Of APPS

The COVID-19 pandemic has accelerated digital disruption and led to significant, long-term market uncertainty. While this pandemic has forced many businesses to reduce or suspend operations, affecting their bottom line, it has helped to accelerate the development of several emerging technologies. This is especially true for innovations that reduce human-to-human contact, automate processes, and increase productivity amid social distancing.

N Nolands Team

CIPC Releases A Directors Quick Reference Guide

CIPC has released a quick reference guide designed to highlight specifically, although not exclusively, critical issues of the Companies Act No. 71 of 2008 that a director should be aware of. The central message of this guide, which is divided into 10 basic markers, is that a director of a company when acting in that capacity:

N Nolands Team

Business for South Africa (B4SA) – A plan to Kick-start Growth Inclusive Economic Growth

When Covid-19 arrived in the country at the beginning of March 2020, it was evident from the experience of other countries that this would have significant health, economic and social ramifications for South Africa. Government, fully supported by business and other societal stakeholders, took swift action and the resulting lock-down provided time to prepare the health care system for patient volumes which it was ill-equipped to handle, and to slow the spread of the virus.

P Profmark Team

IMF Executive Board Approves US$4.3 Billion Loan

The IMF Executive Board has approved South Africa’s request for emergency financial support under the Rapid Financing Instrument (RFI) for an amount of US$4.3 billion to help the country mitigate the adverse social and economic impact of the Covid-19 pandemic.

N Nolands Team

Director's Role Amidst The Covid-19 Pandemic

The director’s role has without a doubt become more onerous amidst the Covid-19 pandemic. However, the Companies Act makes provision for operating in a virtual world, which includes, inter alia:

N Nolands Team

Covid -19 – Level 3 Workplace Regulations

All persons who are able to work from home must do so. However, persons will be permitted to travel to and from work and for work purposes under Alert Level 3, subject to-

N Nolands Team

South Africa in the 2020s – an extract from a recent article by Clem Sunter

Just over 32 years ago in 1987, Clem Sunter published a book entitled The World and South Africa in the 1990s . For South Africa, he played the ‘High Road’ scenario where proper negotiations between the real leaders of the major parties would produce a political settlement that allowed the country to return to the world stage. However, he made it clear that in the long run a thriving economy in which everyone participated was a precondition for the country to become a winning nation.

N Nolands Team

Tito Mboweni in the Spotlight

Over the last few months, Minister Mboweni has made a number of telling tweets that has caused the ruling party to distance themselves from his tweets and haul him over the coals! However it would appear that the minister is being a realist and his tweets are more like an impassioned plea for all to understand the predicament we are in. An extract from a recent speech by Minister Mboweni points out the key reforms that are needed to facilitate the following:

N Nolands Team

Repo Rate Reduced on Back of Favourable Data

A good start to the new year when the Reserve bank announced a surprise reduction of 25 basis points to the repo rate. Good news for those with borrowings and the forecast is that we should get another cut in the 4th quarter 2020.

N Nolands Team

Budget Speech 26th February 2020

South Africa will be holding its breath at 14h00 Wednesday 26th February 2020 as Minister Mboweni presents his Budget for the 2021 financial year. There literally can only be bad news as the whole country is going to be affected by whatever reforms will be announced, but without these reforms South Africa will undoubtedly fail, so we need to make short to medium term sacrifices. There will be increased taxes, what shape or form is anyone’s guess. But this needs to be accompanied with a reduced Government wage bill and holes plugged in our leaking State-Owned Entities.

N Nolands Team