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SNIPPETS

A newsy update on current financial, tax, statutory and economic affairs and happenings as reported by Dave Bridges from Accounting 4 Associates.

 
2016

January 2016

February 2016

March 2016 April 2016
May 2016 June2016 July 2016 August 2016
September 2016 October 2016 November 2016

2017

January 2017 May 2017 June 2017 July 2017

 

July 2017

INTRODUCTION

So now, we have the secret ballot. With statements from senior members that amount to an ultimatum, it doubtful that the vote of no confidence will, in itself, remove Zuma. But, hopefully, the results of the ballot may send a clear message to the ruling party that he has to go.

TECHNOLOGY

Not surprisingly, Window XP is still very popular, particularly among home users and those frustrated by Windows 10. However, XP is no longer supported by Microsoft and therein lies the problem.

XP is vulnerable to a new generation of viruses and malware, e.g., Wannacry. Because of this hackers and authors of malicious code have targeted XP as a prime target.

Therefore, if your XP PC is used to surf the web or has any other internet connection, e.g., email, sooner or later it is likely that you will fall prey to these parasites. If you do not have protection, you risk placing users in your contact database at risk quite apart from the data loss you may experience.

Some patches are still available through reputable Microsoft accredited computer dealers. However, there are also a number of programs available for added protection. Some useful applications are CCleaner Free, IObit Malware Fighter, Malwarebytes Anti-Malware and SUPERAntiSpyware.

It is advisable to consult a reputable dealer before installing any software that has been downloaded from the web.

DEADLINES

Annual Duty – one calendar month to the day after the incorporation date

Promotion of Access to Information Act manual – 31 December 2021 extended yet again!

Special Voluntary Disclosure Programme – 1 October 2016 to 31 August 2017

ITR12 returns;

Channel                                                           Deadline                         Taxpayer type

Manual by post or at SARS drop boxes       22 September 2017                Non-provisional

eFiling or electronic filing at a SARS branch  24 November 2017                Non-provisional

eFiling                                                           31 January 2018                Provisional

IT14 returns                                                  12 months after the applicable year end

Tax returns

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. Clients should be accumulating their tax paperwork now in order to facilitate early submission once. The following should be provided to us:

Proof of income such as:

IRP5/IT3(a) from your employer or pension fund

Tax certificates for investment income IT3(b)

Tax Free Investments certificate(s) IT3(s)

Financial statements (e.g. for business income, which includes the rental of property), etc.

Proof of deductions such as:

Medical scheme contributions certificates and receipts

Completed confirmation of diagnosis of disability form (ITR-DD) if you want to claim any disability expenses

Retirement annuity fund contributions certificates

Travel logbook (if you receive a travel allowance or use a company car), etc

TAXATION

Persons not required to submit an Income Tax return

A natural person or an estate of a deceased person is not required to submit a return if the gross income of that person consists solely one of the following:

(a)       remuneration paid or payable from one single source which does not exceed R 350 000 and employees’ tax has been withheld as required by the deduction tables issued in terms of the 4th schedule of the Act;

(b)        interest (other than that earned on a tax free investment) from a source in the Republic not exceeding –

            (i)            R 23800 in the case of a natural person below the age of 65;

            (ii)            R 34599 in the case of a natural person aged 65 or older;

            (iii)            R 23800  in the case of a deceased estate;

(c)       dividends earned by a person who was non-resident for the entire 2017 tax year;

(d)       amounts received or accrued from a tax free investment

As regards paragraph (a) above, it is important to note the words “one single source”. In other words, one cannot be exempt from rendering a return where one has worked for a number of employers and the aggregate remuneration from those employers had PAYE withheld but did not exceed R 350000.

BUSINESS

Use of trusts as a protection against creditors

In the past, when Sheriffs attempted to recover assets in satisfaction of a debt, it was sometimes accepted that the assets concerned were in the creditor’s wife’s name or in the name of a trust.

Now, according to one financial reporter, proof of ownership is required and such proof must be lodged with the Master of the High Court on registration or upon change of ownership.

It is also necessary to open a bank account in the name of the trust and provide the Master with details thereof. Furthermore, the trust must be registered with SARS and prepare and submit a set of annual financial statements signed by an accounting officer when lodging the annual income tax return.

Minutes of meetings should recorded, especially when new assets are acquired. Any invoice or other documentation relating to the assets should, preferably, reflect the name and registration number of the trust.

Where a beneficiary or trustee occupies a property owned by the trust, a lease should be entered into and signed by all parties to the trust.

Failure to adhere to these requirements may result in the courts ruling that no trust exists. Aggrieved creditors would then be entitled to proceed against the founder and trustees to recover their debt.

ECONOMY

Recent comments by the Public Protector and other influential individuals are indicative of " growing political pressure for less independent monetary policy, a key pillar in our assessment of South Africa's gradually deteriorating institutional strength," Moody's lead sovereign analyst for South Africa, Zuzana Brixiova, said in an emailed research report. "It also sends another unclear signal about the policy direction at a time of very low and falling business confidence, and coincides with governance issues at state-owned enterprises."  This may well result in a downgrading of the country’s sovereign credit rating when that agency conducts its review on 11 August.

The announcement by the speaker of the house to conduct a secret ballot on the vote of no confidence has made a slight impact on exchange rates but, even if Zuma goes thereafter, it is unlikely to make a major impact on Moody’s decision on whether the credit rating drops or improves. Some commentators believe that a government, lead by the present speaker, and the wholesale resignation of the president’s corrupt cronies may well lead to a downgrade.

In 2009, SA fell into recession because of the global economy. However, the global economy is now in recovery but, alas, SA is not. Why?  This is mainly due to the widespread corruption and highly indebted state owned companies relying on the government for handouts to enable their recovery. Surviving on handouts, SAA has been loosing money since 2011. Escom, unable  or unwilling to take action against township based debtors and illegal connections, is in debt to the tune of R 350 billion and the government is in dire straights where it cannot raise capital on favourable terms and, if junk status is confirmed, may not even be able to meet its debt payment obligations.

Then along came Minister Zwane’s new mining charter. The Reserve Bank’s governor has slammed the minister’s move to halt the awarding of mining rights. The mining sector is a highly significant role player in South Africa. The new charter is highly unlikely to attract new investment when a shaft may take up to 30 years before becoming profitable.

TAILPIECE 

“Count your age by friends, not years. Count your life by smiles, not tears.” - John Lennon