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August 2011 INTRODUCTION The
Minister of Finance has called for suggestions as to how to
achieve a 7.5% growth rate, and increased employment whilst making
the economy globally competitive. We have a look at a few ideas
below. TECHNOLOGY From
time to time, you may wish to email a workbook that contains links
to other workbooks without sending the linked documents. To do
this save the workbook to preserve the existing links, then
TAXATION Provisional taxes The
filing date for the first provisional tax returns for the 2012 tax
year is now behind us. However, recent procedural changes by SARS
make it advisable to examine the law and ensure that all taxpayers
are aware of their responsibilities. The
Income Tax Act defines a provisional taxpayer as: ·
Any person, other than a company, who derives any
amount of income that does not constitute remuneration. The
Act regards a trust as a person. ·
Any Company or Close Corporation; and ·
Any person who is notified by SARS that he/she is
regarded as a provisional taxpayer. The
Fourth Schedule of the Act then goes on to define those categories
of taxpayers that are exempt from the need to submit a provisional
tax return. For the purposes of this article, we confine ourselves
to the exemptions available to our clients. Those exempted are as
follows:
Any
person who does not fall into one of the two exemption categories
is required to submit a provisional tax return every six months,
usually, depending on their tax year-end, on 31 August and 28/29
February of each year. These
returns are based on an estimate of taxable income. In respect of
the first payment for a tax year, the estimate may not, without
the consent of SARS, be less than the basic amount. The basic
amount is equal to the taxable income for the latest assessed
year, excluding any capital gains or lump sums, escalated by 8%
per annum. Thus, if the latest assessment is for 2010 and we are
preparing a 2012 return, the escalation is 16%. If no basic amount
is available, an estimate must be used. There does not appear to
be any penalty where the estimate for the first period is less
than the basic amount. However, if the payment is made after the
deadline, a 10% penalty will be levied together with the
prescribed interest. In
respect of the second period, a two tier system exists. A
different regime applies where the actual taxable income for the
year is less or more than one million rand. Where
the taxable income is less than R1 million, in order to avoid a
20% penalty on final assessment, the estimate used must be equal
to the SARS calculated basic amount or not less than 90% of the
taxable income for the year as finally determined upon lodging the
annual tax return. Where the taxable income is greater than R1
million, the option to use the basic amount does not apply and the
taxpayer must use an
estimate which, in order to avoid the 20% penalty, cannot be less
than 80% of the taxable income as finally assessed. SARS
no longer issues the necessary forms on which both payments must
be calculated. The onus is now placed upon the taxpayer to request
the returns should he/she feels that they need to submit a return. If,
before the expiry of seven months from the end of a taxpayer’s
year end, the taxpayer wishes to make a payment against the
liability for that year end, he/she may do so without additional
interest being imposed. This does not apply where an assessment is
issued prior to the expiry of that seven month period. In that
case, the balance on the assessment must be paid on the due date
reflected on the assessment. DEADLINES Voluntary
Disclosure Programme – 1 November 2010 to 31 October 2011 Annual
Duty – end of the month following incorporation date EMP 501 2012 1st period 1
September 2011 – 31 October 2011 Disposal
of a residence from a company or trust – 31 December 2012 Income Tax Returns – 2011
Individuals: Manual
submissions – 30 September, 2011 Efilers: Non-provisional taxpayers –
25 November, 2011 Provisional taxpayers – 31
January 2012 ECONOMY Following
on earlier themes in the newsletter and in response for the
Minister’s call that is outlined in our introduction, we examine
some aspects in achieving those goals. The
prime means of production is capital and this is provided by
investors. Therefore, there is a need to foster investor
confidence. Without a feeling of security of tenure businessmen
will be increasingly nervous about expanding their operations and
may even be giving thoughts to moving elsewhere and, in this
regard, we are not just referring to international investors. Talk
amongst observers of South Africa becoming another Zimbabwe is
prompting emigration resulting in skills loss. A similar state of
affairs existed in the run up to the introduction of democracy and
the loss of skills that were lost then have not been replaced by
an education system that falls far short of international norms.
If this is to be avoided, the government needs to remove all
obstacles that undermine the perception that the country is headed
towards anarchy. A
secondary means of production is labour. There is a need for a
skilled labour force that is capable of producing goods at a
competitive price. To do this, a South African worker needs to
produce better quality goods at a cheaper level than the
country’s competitors. Therefore,
it is necessary to have a stable motivated labour force. Whilst
employers should be cognisant of their employees’ happiness to
do whatever is reasonable to achieve this while at the same time
being competitive, labour needs to act responsibly in its
negotiation tactics and not resort to the behaviour witnessed of
late that adds to the perception of anarchy. The government needs
to re-examine its labour law and BBBEE policies to make it easier
for business to operate without impairing workers rights or
impairing their advancement opportunities which should be based on
performance and not skin colour. A
third leg of the process and, possibly the most important, is the
role of government and more especially the civil service. One must
bear in mind that more people are employed in the small business
sectors than in any other sector of the economy. For that sector
to thrive, government must facilitate the rapid formation of
business entities and minimise
the compliance costs across the board. Further, it needs to
inspire confidence by leveling the playing fields. To do this, it
needs to come down hard on corruption and nepotism. TAILPIECE "I
like long walks, especially when they are taken by people who
annoy me." (Noel Coward) |
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