A belated welcome to 2016 but don’t get to comfortable.
Economically, it’s going to be a slip and slide instead of a
climb every mountain type of year.
Duty – one calendar month to the day after the incorporation
of Access to Information Act manual – 31
December 2021 extended
tax returns for the second period of the 2016 tax year – 26
Income Tax returns for Companies (IT!14) – 26 February 2016
Suppose you need to add the figures contained in
columns B through to M and in rows 10, 15 and 20. Using the normal
method one could type the requisite formulae as
=sum(B10:M10)+sum(B15:M15)+sum(B20:M20). However, Excel provides a
shorter method which is =Sum(B10:M10,B15:M15,B20:M20). Excel will
allow up to 30 ranges in this formula.
Tax clients should note that unless we receive all
the relevant data and documentation at least fourteen days before
the applicable submission deadline we cannot be held responsible
for any punitive action taken against them by SARS.
Provisional Tax – 2nd period 2016
This return must be
submitted on or before 26 February 2016.
In respect of taxpayers
whose taxable income is R 1 million or less, the tax liability may
be based on the basic amount. The basic amount is the taxable
income of the latest preceding tax year as long as the assessment
is issued prior to 12 February 2016. If the assessment is older
than 18 months an amount equal to 8% per annum of the taxable
income must be added to the taxable income to determine the basic
amount, e.g., if the 2014 assessment is used the taxable income
must be increased by 16% to arrive at the basic amount.
Taxpayers in this category may also use their own
estimates. However, if the estimate is less than 90% of the actual
taxable income as finally assessed, penalties will be imposed.
Therefore, it is advisable to use your own estimate only where
your actual income is likely to be substantially lower than the
For taxpayers whose taxable
income is in excess of R 1 million the option of using the
historical basic amount is not available. These taxpayers must
base their liability on an estimate.
Penalties will be imposed if the estimate is less than 80%
of actual taxable income as finally assessed. Therefore, it is
essential that estimates must be as factual as possible and
careful thought be put into their preparation.
SARS has announced that
their systems will be down for routine maintenance from 18h00 on
Friday 12 February 2016 until 08h00 on Saturday 13 February 2016.
This seems to happen every year when tax practitioners are putting
in overtime to meet the year end targets.
You have only a few more
days to contribute or top up your contributions in order to avail
yourself of the tax saving benefit of such an action. As the law
stands, currently, the deduction is the greater of:
R 3500 less contributions to a pension fund
15% of your non-retirement funding income,
excluding any retirement fund lump sum benefits
In calculating your
non-retirement funding income, you may take into account:
Interest earned less the tax free exemption of
R 23800 or R 34500 if you are over 65 years of age. Earnings from
tax free savings products should also be excluded.
any travel allowance reduced by the amount of
any claim for travelling expenses
Restraint of Trade
Previously, with effect
from 23 February 2000, restraint of trade payments, in favour of
employees and sole proprietors who were disposing of their
business, were fully taxable. In an about face, this has changed
with effect from 1 March 2015 and these now become only subjected
to the Capital Gains provisions of the Income Tax Act as contained
in the 8th Schedule. This important change was
introduced without fanfare in terms of the Explanatory Memorandum
to the Taxation Laws Amendment Bill 2014.
Capital Gains upon death
A taxpayer’s assets,
to which capital gains tax applies, are deemed to be disposed of
at the market value of the assets at date of death. Excluded from
this ruling are:
Assets disposed of to the surviving spouse in
terms of the will
The proceeds from any term insurance policies
Interest in pension, pension preservation,
provident fund, provident preservation or retirement annuity funds
in the Republic
Any assets that are
deemed to have been disposed of and subjected to the Capital Gains
provisions will be passed to the beneficiary at the current market
value and that will be the base cost that the inheritor may use,
for CGT purposes, upon his/her subsequent disposal of the asset.
if subsequent to date of death, the executor disposes of any such
asset, the liability for Capital Gains Tax must be met by the
beneficiaries of the estate.
An irreverent look at some myths
It is normal to have
debtors – wrong! You’re not a charity organisation. Clients
only become debtors if you allow them to.
You are in business to
help people. Wrong! That is what charity organisations are for.
You are in business to make money. Debtors are customers to whom
you grant an interest free loan. Who does that in the world of
finance? Tell us and we’ll apply for one!
If you apply stringent
collection procedures you will chase debtors away. If that’s the
case you don’t need them. Find replacements who will appreciate
you being businesslike.
Our customers are our
friends. When did you last invite them to your house for a braai?
You provide them with a service in return for a reasonable reward.
Looking after clients
ensures they will look after you. Nonsense! Just try relaxing your
service levels without a price reduction. You won’t see ‘em
The right approach
Spell out your terms – we will provide you with a top
flight service. In return, we expect you to abide by our terms.
Any deviation from these will not be tolerated and will result in
the immediate instigation of stringent collection methods – the
big stick – no not literally, that would be a crime mores the
Make sure your systems are designed to facilitate the
procedures in 1 (above)
Make sure your staff are aware of the policy and apply it.
to one commentator, with whom we concur, the labour movement is
weaker now than at any time since the transition into democracy.
Employers may laud this but it is a double edged sword insofar as
militancy levels tend to rise in these circumstances.
what does that mean for our economy which is already under
pressure for various reasons? Among others, these are:
Poor management and corruption – Nenegate is
a mere part of this
Diminishing growth – to a large extent due to
events in the economy of our biggest trading partner, China.
Currency weakness – to some extent due to
dollar strengthening but also to the above factors
factors have contributed to the downgrading of the country’s
credit status to just above junk status. This will impact upon the
government’s ability to borrow funds to meet its development
goals and mean that a further burden will be placed upon citizens
to meet this deficit or a reduction in the development goals.
Given the desire to stay in power, it is highly unlikely that such
a reduction will occur. Further, its is unlikely that there will
be any call for contributions to the kitty by the lower level wage
earners. Therefore, it seems likely that the budget will place
additional financial burden upon the middle to upper echelon
earners and corporate taxpayers.
factor in the ensuing labour militancy that is likely to occur
during the middle of this year. The upshot is a possibility of a
further credit rating downgrade, higher inflation levels
particularly in food prices, further rises in the unemployment
figure with the attendant rise in poverty driven crime and a
general lethargy in the work place.
businesspersons should be making provisions to cope with these
possibilities rather than react when they occur.
don’t know where I’m going from here but I promise it won’t
be boring.” – David Bowie