ACCA and GCRA Partner to Education 250 Learners

ACCA joins hands with the Gauteng City Regional Academy in the bid to challenge some pertinent issues that face the SA environment. The partnership seeks to make the best use of the online learning tool that has been developed by ACCA, commonly known as ACCA-X, for the transformation of the lives of youth that have matriculated but find themselves excluded from further education and training or employment for various reasons.

250 learners from the 5 corridors of Gauteng will be taken through the programme for a year commencing in April. The ACCA-X programme is the ideal starting point for future business leaders, accountants and entrepreneurs. It consists of four online learning modules designed to develop knowledge and skills, at foundation level, in financial and management accounting.

Upon completion of the four modules (Introductory and Intermediate Certificates in Financial and Management Accounting), learners will be equipped to perform a range of accounting administration roles within an accounting department of a larger organization or financial shared service center.

This programme comes just in time to deal with the shortage of accountants in the country and also to support the promotion of entrepreneurship in youth.  Details of the launch date are as follows:

Date: 31 March

Venue: University of Johannesburg (Auditorium room number to be confirmed)

Time: 9am -12pm

Event details: 100 of the 250 learners and their parents will be present, as well as the Gauteng MEC for Education and the ACCA Sub Saharan Markets director, Mr Jamil Ampomah.

Guest Blogger: Budget 2016 Summary – tax proposal

ACCA_ThinkAheadLogo2

 

Overview

Tax revenues in 2015/16 are projected to be R11.6 billion below the 2015 Budget forecast: corporate income tax collection is estimated to be R13 billion lower, value-added tax (VAT) R5.7 billion lower and personal income tax R1.9 billion lower. These lower revenue outcomes will be partially offset by an increase of R4.3 billion from customs duties.

 

Ensuring a sustainable tax burden

South Africa’s tax burden sits roughly between the average for developing and developed economies. While personal and corporate income taxes are relatively high, the VAT rate is lower than in most other jurisdictions, especially those with high levels of social spending.

 

Keeping the tax system progressive

South Africa’s tax system is highly progressive. Individuals below the age 65 whose annual taxable income exceeds R1 million pay 31 % of such income in tax, while those earning below R250 000 pay less than 15 per cent. Of the 13.7 million registered taxpayers, fewer than 1 million individuals contribute 64 % of personal income tax revenue.

 

The current tax mix suggests that there may be greater room to increase indirect taxes, such as VAT.  South Africa’s VAT rate lower than most countries.

 

Protecting the corporate income tax base

Increased focus on multinational tax avoidance and evasion, of particular concern are:

 

  • Unacceptable transfer-pricing practices, where the value or nature of cross-border transactions is manipulated to reduce overall tax liability.
  • Treaty shopping, where related companies in different countries establish a third entity in another location to obtain tax-treaty benefits.
  • Highly geared financing structures that reduce companies’ tax liabilities with excessive interest-expense deductions.

 

Additional steps have been taken by SARS to reduce such abuse are the following:

  • Improving the quality of information firms must provide to SARS, enabling it to identify aggressive or abusive tax-planning schemes.
  • Taking action on transfer pricing- Large multinationals will be required to submit reports for each country in which they do business to the tax authority where their head office is located this will be in line with country by country reporting. Tax authorities will share this information starting from 2018. SARS will have access to country-by-country information on all large multinationals operating in South Africa.
  • Enhancing rules on foreign companies controlled by a South African resident, so that a portion of profits earned by a South African-owned subsidiary operating in another country is taxed in South Africa if no meaningful economic activity took place in the other country
  • Introducing rules that limit excessive interest deductions- S23M

 

Voluntary disclosure

  • Voluntary disclosure rules will be relaxed for a period of six months, from 1 October 2016, to allow non-compliant individuals and firms to disclose assets held and income earned offshore.

 

Other

  • Review of employment and learnership tax incentives under way
  • Government to increase incentive for employer bursaries

Personal taxes

  • Primary rebate and the bottom three income brackets be adjusted by 1.8 per cent and 3.4 per cent respectively:
  • Primary (for all taxpayers) R13 257-R 13500
  • Secondary (aged 65 and over) R7 407 unchanged
  • Tertiary (aged 75 and over) R2 466 unchanged
  • Marginal personal income tax rates remained unchanged at 41%.
  • Tax free income threshold has been increased as follows:
  • persons under 65 years from R 73 650 to R 75000,
  • persons between 65-74 years from R114 800 to R116 150
  • Persons over the age of 75 years from R 128 500- R129 850

Employees earning R75 000 p.a. or less will not be subjected to PAYE.

  • Medical scheme contribution credits will increase from R270 to R286 pm for the 1st two beneficiaries and from R181 to R192 for additional members effective 1 March 2016. Please note employees are allowed to tax credits related to medical scheme contributions t for both monthly PAYE deduction and provisional tax purposes.
  • Retirement savings- From 1 March 2016, an important change to the tax treatment of contributions to retirement savings and how they are withdrawn at retirement comes was to come into effect, the proposal to annuitize the withdrawal from provident fund has been postponed to 1 March 2018. Cosatu lobbied for the postponement of the legislation.

 

Corporate tax

  • The corporate tax rate remained unchanged at 28%
  • Proposal to address double non-taxation in hybrid debt instruments- to eliminate mismatches associated with hybrid debt instruments where the issuer is not a South African resident taxpayer, this rules will be effective with effect from 24/02/2016.

 

Value added tax

The VAT rate remained unchanged at 14%.

 

Capital gains tax

Capital gains tax rates on the disposal of assets will increase with effect from 1 March 2016:

  • Individuals and special trusts-13.7% to 16.4%
  • Companies- 18.6% to 22.4%
  • Other trusts- 27.3% to 32.8

 

Other taxes

Transfer duty on properties above R10 million will crease from 11% to 13% from 1 March 2016

Analysis by Mpho Lefakane

Guest Blogger: A macroeconomic analysis of the Gordhan budget of 2016

joy

The most urgent economic question has been and possibly is whether the RSA sovereign debt is going to be designated junk status. The Gordhan budget of 2016 demonstrates the willingness of the republic to repay its debt beyond any shadow of doubt. This has been demonstrated by a modest but positive economic growth rate at an average of 1.8% p.a. in the next 3 years coupled by a reduction in the budget deficit of half a percent over the next 3 years on average. This demonstration has certainly reduced the threat of a downgrade; however it has not done away with it completely. From the start, it was never cast on stone that RSA was to be downgraded to junk status. However it was on a fast and slippery slope towards that status and the budget has certainly placed some speed breaks on that.

Our economy is stalling and the risk of a recession is still a reality as espoused by the Worldbank indicators of 2015/16. As a currency, the rand seems to be oversold and undervalued. The Gordhan budget has failed to address these two key fundamentals as it has not brought forward adequate austerity measures which would be reflective of a significant policy change on the part of government. In the absence of such policy change -the combination of muted global growth, low business level confidence, drought and persistently low resource prices will result in South Africa continuing to lose its attraction as a destination for capital.

A very positive approach in the Gordhan budget is the realization that when considering raising additional revenue for the republic, tax is not the only solution. Some key parts of the solution in his budget include expenditure cuts of approximately R8 billion p.a. over 3 years on average, curbing the size of the civil service (although there is no clear plan for how this is going to be achieved), having a growing economy at 1.8% p.a. on average over 3 years and creating jobs. When it came to the numbers, the only accounted for increase in revenue of R18billion is underpinned on an increase and introduction in levies. Levies in essence are an indirect tax as they still result in the increase in the cost of living for everyone.

In conclusion the budget is factually a very reactional statement which is not indicative of a major economic policy changes by the government of the republic. It has been well crafted to say the right words, terms and figures to avoid the downgrading of our sovereign debt to junk status. It is indeed a missed opportunity because of its short-termism, hollow but clever statements and primarily its speculative nature.

http://www.fin24.com/Budget/recession-risk-still-a-reality-expert-20160225

Sustaining Our Communities: Arbor Month

ACCA_Forest

In South Africa, Arbor Day was first celebrated 32 years ago. Whilst it has been over 135 years since the idea was founded by J. Sterling Morton. Celebrations of this day in the country were further extended to National Arbor Week (1 -7 of September). However, it is now celebrated for the entire month of September. The Department of Agriculture, Forestry and Fisheries (DAFF), are the custodian of forestry in South Africa and responsible for the campaign.

During this time schools, businesses and organisations participate in community events that assist to improve the health and beauty of the local environment by planting indigenous trees and tress that are suitable for the local environment or by simply cleaning our public parks. Some of the oldest, largest and culturally significant trees, which include the Sophia Town Oak Tree and the Sagole Baobab Tree in Limpopo, have hence been chosen this year in investing in a sustainable future for South Africa.
This year’s campaign is being used as a build-up towards the XIV World Forestry Congress that will take place from 7 to 11 September 2015 at the Inkosi Albert Luthuli International Convention Centre in Durban. The congress aims to highlight the value of forests with regard to sustainable livelihoods, environmental conservation and development in general.

Some of the benefits of planting and conserving trees: We plant trees for soil protection, to produce oxygen, to clean pollution from the air, as shelter for animals, to protect us from severe wind storms, to increase our property values, for food and shade building.

CFOs Required To Plan Ahead

man_drawing_graph_going_up

“He who fails to plan, plans to fail”, an age-old adage that has guided individuals and companies to success still rings true in the fight against gender imbalance in the workplace.

Regulatory requirements do their bid in combating gender imbalance in senior management positions, but it is only when companies are exposed to the true benefits of gender diversity that the balance will materialise. The finance sector has shown great results in embracing gender diversity – in South Africa, the mining and finance sectors boast the most female participation in senior positions than in other sectors. CFOs and their team leaders have an opportunity to level the scale by using available data within the organisation and also through their “top table” positions.

The ACCA report, gender diversity to boost business performance, highlights four things that CFOs and their team leaders can do in order to tilt the scale of gender diversity:

  • ESTABLISH THE BUSINESS CASE

Incorporate increased shareholder value (eg through increased sales achieved by reaching a wider customer base), wider stakeholder value (including greater employee satisfaction) and a strengthened global value chain.

Include the downside risks of poor diversity (such as lost business, poor decision making or regulatory costs).

Tailor your business case to the needs and interests of other senior executives to achieve maximum buy-in.

  • SET TARGETS AND KPIS

Set challenging targets for diversity: 40% of senior roles to be filled by women, for example.

Analyse financial and other data to establish links between diversity and performance.

Identify both hard (eg gender headcounts) and soft (eg employee satisfaction) diversity measures.

  • MANAGE DIVERSITY

Establish systems, processes and a culture that enable the expression of differing viewpoints.

Provide training in how to work effectively in diverse groups.

Set out clear progression criteria based on performance and potential.

Establish sound governance around diversity actions, for example, by including diversity KPIs in management reporting packs.

Set realistic expectations for diversity initiatives: ‘quick wins’ are unlikely.

  • BE TRANSPARENT

Report internally on diversity targets and measure performance against them.

Meet investor and regulator needs by reporting diversity information externally.

The lack of commitment to diversity by companies is highlighted as a barrier in the ACCA report. If CFOs and their team leaders would take steps such as the ones listed above, the issue of gender diversity in the workplace, and in senior positions, will be achieved much sooner than 2095 as predicted by some research.