October 2011
INTRODUCTION The
high unemployment statistics, although reducing slightly in
September was one of the catalysts for the recent youth march in
Gauteng. Recent youth uprisings throughout the world should act as
a warning to our government to take seriously the plight of our
youth. TECHNOLOGY In
Excel, you may wish to locate entries ending in an *. The problem
here is that the asterisk is the symbol one uses when conducting a
wildcard search. E.g., you might want to find cells containing the
word “Mike”. Using wildcards, one would type Mike*.* in the
“Find What” field of the Find screen (CTRL+F). However, to
find a cell containing an asterisk, one must type *~*. Similarly,
to find a cell containing a question mark, one must type *~? in
the “Find What” field. TAXATION Tax Laws Amendment Bill This
bill that was promulgated on 26 October 2011, will, when passed
into law, give affect to some of the changes foreshadowed in the
budget and mini budget. Included
are changes to certain life assurance policies affected on the
lives of employees by the employer. Most notable is the proposal
relating to so-called Keyman Policies. These policies are intended
to cover the costs experienced when a key employee either passes
away or is disabled to the extent that the operations of the
business are impaired. Under
the present regime there are two possible methods of dealing with
the tax consequences of these policies:
The
latter method creates difficulties in that not only will the
business be incurring additional costs connected to the loss of
the key person at the time of the maturity event but also it will
incur a simultaneous tax liability that may well detract from the
object of establishing the policy. Therefore,
it is proposed to give the employer the option to opt for the
regime that will be applied to these policies in future. This
will necessitate the signing of an addendum to the policy. For
pre-existing policies, the election must be effected before 1
March 2012. Employers are urged to consult their insurance brokers
in this regard. Policies taken out after that date must include a
declaration as to which regime will apply to the policy. These
elections will be made in terms of Section 11(w)(ii) of the Income
Tax Act. An
amendment that will impact upon many persons who conduct their
business through the medium of a company or close corporation
relates to loan or advances made by the entity to the
member/shareholder. With effect from years of assessment ending on
or after 1 April 2012 these loans will give rise to a deemed
dividend. Where the loan or advance is subject to defined
repayment terms, the value of the deemed dividend will be the
market related interest applicable to the loan less the amount on
interest actually charged. Where no repayment terms are
stipulated, the full amount of the loan/advance will be a deemed
dividend. The company/corporation will have to withhold dividend
tax from such loans/advances. Therefore, entity owners who, at
present, use company funds for personal expenses and the total of
such advances exceed their net salaries will fall into the tax net
with regard dividends. The practice of taking a salary in cash and
making additional withdrawals to fund private expenses will need
to be curtailed. DEADLINES Annual
Duty – end of the month following incorporation date Disposal
of a residence from a company or trust – 31 December 2012 Income Tax Returns – 2011
Individuals: Efilers: ****Non-provisional
taxpayers – 25 November, 2011**** Provisional taxpayers – 31
January 2012 BUSINESS Given that unemployment is a
very emotive topic, it must be recognised that, in many instances
it goes hand in glove with retrenchments. Therefore, it is
opportune to discuss what amounts must be included when
calculating severance pay and what amounts may be excluded. Inclusions
Exclusions
ECONOMY Unemployment
amongst the youth could have catastrophic consequences if not
addressed. The impact of economic factors on this problem cannot
be understated. However, equally important is the role that is
played by the education system. The
role of education, at whatever level, is to prepare the learner
for a life in the mainstream economy. However, many tertiary
education institutions are testing the applicants’ numeracy and
literacy before admitting them into a study course. High
failure rates in professional examinations have been linked to
inadequate education in basic arithmetic and in English. Whilst
students who have had the benefit of private education have
excelled, those who were schooled through government schools have,
in the main, fallen short of tertiary entry-level requirements. If
this inadequacy does not result in political upheaval, in the
medium term, it will have the effect of denying the economy
suitably skilled staff and this, in turn, will result in poor
productivity and a diminished share in the world market.
Therefore, as a matter of urgency, government needs to enhance the
quality of education provided by its schools. The
other platform for the recent youth march was that of
nationalisation. We have only to look at countries north of us, to
see how this too will lead to degradation of productive assets. In
Zambia, under Kaunda for example, during the period that the mines
were nationalised, copper production decreased significantly,
inflation rose to staggering levels and unemployment followed
suit. With a change in government and the implementation of
de-nationalisation, these trends were reversed and the government
of Michael Sata inherited an economy that was in a recovery cycle. Closer
to home, the land grabbing policies of Uncle Bob has decimated the
agricultural sector to the extent that a country that was an
exporter of food products is now dependant on imports. TAILPIECE “When
I was 5 years old, my mother always told me that happiness was the
key to life. When I went to school, they asked me what I wanted to
be when I grew up. I wrote down ‘happy’. They told me I
didn’t understand the assignment, and I told them they didn’t
understand life.” John Lennon
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