Faking qualifications – now a criminal offence

President Cyril Ramaphosa has signed the National Qualifications Amendment Bill into law. This means that South Africans who are found guilty of misrepresenting their qualifications could face a harsh fine, up to five years in prison, or both.

This is not limited to the submission of a CV, but could also include making the claim on social media platforms such as Facebook or Twitter.

Anyone, not just employers, can report people making false claims to the South African Qualifications Authority, which will publish a national name and shame list of fraudulent credentials.

The Act goes further to also impose potential fines and imprisonment sanctions for educational institutions who make false claims.

Confirming Employment & POPI

The Protection of Personal Information (POPI) Act was created to ensure that all organisations in South Africa behave in a responsible manner when gathering, processing, storing and distributing another individual’s personal information. Organisations will be held accountable if there is abuse of any type of personal information.

Failure to comply with this legislation will result in fines of up to R10 million and/or up to 10 years in jail time for some offences. This right to protection of personal information does not only apply to individuals but any legal entity, including businesses and communities.

As an employer, you will often be required to confirm employment for loans; accounts and/or references. You will further be required to share personal information for the purpose of processing payroll, managing medical aids and/or post-retirement benefits and in dealing with government agencies. In terms of the POPI Act it important that you have obtained permission from the individual concerned before disclosing any confidential information otherwise you could be in contravention of the Act. This includes all details relating to the employee’s employment with you.

For more information and/or if you require the relevant HR related POPI documentation please contact [email protected].

Mauritius Budget Speech

(Source: www.crs.co.za)

On Monday, 10 June 2019, the Prime Minister and Minister of Finance and Economic Development, Pravind Jugnauth, delivered the last Budget Speech of the present Government.

Key Highlights of the Budget Speech

The budget deficit is estimated to maintain course at 3.2% of GDP for financial year 2019/2020. Public Sector Debt to GDP has increased to 63% in 2018, and Government plans to reduce the debt to 60% before 2021 by using part of the undistributed surplus of the Bank of Mauritius. Real GDP has been increasing at an annual average rate of 3.7% since 2015 and is forecast to rise further to 3.9% in 2019 and 4.1% 2020.

The inflation rate and unemployment has decreased over the last years. 

The tax legislation will be amended to introduce rules on controlled foreign companies (CFC).

Personal Income Tax Measures

Income exemption thresholds for all categories of taxpayers for the income year 2019-2020 are being increased as follows:

  • For a taxpayer who has no dependent or one dependent, the threshold will increase by MUR5,000;
  • For a taxpayer with two dependents, the threshold will increase by MUR20,000;
  • For a taxpayer with three dependents, the threshold will increase by MUR25,000; and
  • For a taxpayer who has four dependents, the threshold will increase by MUR45,000.

The additional deduction for a child pursuing tertiary studies and relief for medical insurance premium will now be available for a maximum of 4 dependents instead of 3 dependents.

The additional income tax exemption of MUR50,000 will be granted to a retired or disabled person having more than one dependent, instead of being restricted to those having one dependent only.

The annual net income subject to tax at a lower rate of 10% has been increased from MUR650,000 to MUR700,000.

In addition, an individual deriving a basic salary including compensation not exceeding MUR50,000 in his first month, will benefit from a tax credit of 5% of his chargeable income, provided that his annual net income does not exceed MUR700,000.

Solidarity levy not applicable to lump sum income received by a person as pension or death gratuity, effective retrospectively as from 1st July 2017. However, the levy will now apply on an individual’s share of dividend in a société (partnership) or succession.

Kenyan National Housing Development Fund Implementation Delayed

(Source: www.crs.co.za)

On Monday, 27 May 2019, the implementation of the National Housing Development Fund (NHDF) levy was extended by the Employment and Labour Relations Court, barring the government from implementing the disputed 1.5% housing levy.

The housing levy was to take effect in May following a public notice by the government in April ordering employers to deduct and remit the levy by the 9th of every succeeding month.

The case was initially filed by Central Organisations of Trade Unions (Cotu). The case was also filed by various other parties that include Central Organisation of Trade Unions (COTU), Trade Union Congress of Kenya, Consumers Federation of Kenya (CoFeK) and the Federation of Kenyan Employers (FKE) challenging the levy.

Ghana Changes to Tax Rates

An additional Personal Income Tax band of 35% for monthly income in excess of GHS10 000 was introduced during the Mid-year Budget Statement and came into effect 1 August 2018.

Following feedback from the public after the implementation of the new tax band, Government concluded that some relief from this tax measure is justified. Accordingly, Government reviewed this band to impact monthly income above GHS20 000 at a rate of 30%. The Income Tax Amendment (No. 2) Act, 2018 (Act 979) has since been amended to revise the rates for the taxation of income of resident individuals.

The Income Tax Rates came into effect on 1 January 2019.

Namibia Budget Speech

The Minister of Finance, Hon. Calle Schlettwein, presented the 2019 Budget Speech to Parliament on 27 March 2019.

  • The budget deficit is estimated at N$8.2 billion or 4.1% of GDP and averaging 3.4% over the Medium Term Expenditure Framework (MTEF).
  • Inflation remains stable at 4.4% in February this year, after averaging 4.3% over 2018.
  • Total revenue for 2019/2020 is estimated at N$58.4 billion, 3.0% better than the estimated outturn for 2018/19 and 29.7% of GDP.
  • Expenditure as a proportion of GDP reduced from 42% to 34.9% in FY 2018/19.
  • Old age pensions are increased by N$50 to a monthly grant of N$1300.

The main tax proposals include:

  • Phasing out the current tax incentive for manufacturers and exporters of manufactured goods, repealing the Export Processing Zone and introducing the Special Economic Zones, with a sunset clause for current operators with the EPZ status.
  • Introducing a 10 percent dividend tax for dividends paid to residents.
  • Subject income derived from commercial activities of charitable, religious, educational and other types of institutions under Section 16 of the Income Tax Act to normal corporate tax requirements.
  • Taxing all income earned from foreign sources. Namibian residents will have to declare such income in their annual tax returns.
  • Increase the tax deductibility of retirement fund contributions from the current N$40,000 per annum to 27.5% of income with a maximum of N$150,000 to encourage savings and provisions for retirement.
  • Disallow deductibility of fees and interest paid to non-residents for calculating taxable income until payment of withholding tax paid is proven.
  • Remove VAT zero-rating on sugar.
  • Disallow deductibility of royalties for non-diamond mining entities.
  • No changes in personal or corporate tax rates proposed.

Employee New PAYE Business Reporting for Employer Filing Season

Effective September 2019

SARS published the tax certificate specification document on 21 January 2019.

The document specifies the requirements for the generation of an import tax file for the annual as well as the interim submission. The requirements in this version of the BRS will become effective from September 2019 PAYE interim reconciliation period.

The details of the changes are highlighted in green in the BRS.

To access the new BRS, follow the link.

2019 Budget and Tax Highlights

We will be going through the budget in more detail and will hold our annual tax seminars in due course (dates to be announced) when we have had time to consider the practical application of new rules on payrolls and employers.

In the interim, the key highlights and overview of tax changes are obtainable from Treasury using the following links:
•  Budget Highlights
•  Tax Guide 2019
•  Tax Legislative Changes

One of the positive things to see is that SARS intends resurrecting the large business centre with a hope to start this again in April 2019. They have also emphasised their commitment to improving their IT infrastructure.

Other relevant highlights are the following:

Employment Tax Incentive
In 2018, Government extended the employment tax incentive by 10 years. In addition, the eligible income bands will be adjusted upwards to partially cater for inflation. From 1 March 2019, employers will be able to claim the maximum value of R1 000 per month for employees earning up to R4 500 monthly, up from R4 000 previously. The incentive value will taper to zero at the maximum monthly income of R6 500.

Medical Tax Credits
To generate additional revenue of R1 billion in 2019/20, there will be no change in the monthly medical tax credit for medical scheme contributions.

Fuel Taxes
South Africa has three main fuel taxes that apply to petrol, diesel and biodiesel: the general fuel levy, the customs and excise levy and the RAF levy. These levies fund general government expenditure, support environmental goals and finance the RAF. From 5 June 2019, a carbon tax of 9c/litre on petrol and 10c/litre on diesel will become effective. Diesel refunds cannot be claimed against this tax. The general fuel levy will be increased by 15c/litre for petrol and diesel from 3 April 2019. The increase is slightly below inflation. Government also proposes to increase the RAF levy by 5c/litre from 3 April 2019.

Applying for an Exemption from the National Minimum Wage

On 19 December 2018, the Minister of Labour gazetted the process for companies to apply for an exemption from the National Minimum Wage.

It is important to note the following:

  • The exemption, if granted, is only for 12 months.
  • The applicant needs to show it cannot afford the minimum wage and must have consulted all applicable unions and bargaining councils.
  • Even if granted, the company will still need to pay a minimum of 90% of the minimum wage (R18 per hour currently).