You would, no doubt, have seen that our economy is now predicted to grow at some 5% this year. The interesting thing about this is that the economists, who so predict, say that we should be able to maintain that momentum – especially if the government is true to its word and creates a more enabling economic environment by removing the obstacles to growth. One of the reasons for our resurgent economy is that our middle- and upper-income groups, which account for some 80 to 85% of the spending power in this country, have not declined to the extent anticipated. Our composite leading business cycle indicator has just hit an all-time (61-year) high.
Two of the restrictions on our economic growth is the over-concentration of power in the hands of the government, resulting in the overregulation of our economy and restrictive labour legislation. If this changes, and if our labour legislation is addressed, I would eat my underpants.
You will recall that a week ago there was much talk about extending our social grant system: now termed BIG (basic income grant) changes. The changes mooted will create a three-pillar system comprising social grants, contributory social insurance, and voluntary insurance. For this to be affordable, without raising our total spend and thus taxes, money will have to be saved elsewhere in the state budget (remember the promise to cut spending?). It would be interesting to see how much we must contribute for the presumably compulsory social insurance… a tax by any other name?
So, are we going to pay more tax and what will the result of this be? Two academics from the UP have published an article predicting a tax revolt in South Africa on the back of a high taxes: they say that South Africa is within the top ten countries with the highest tax-to-GDP ratios, and that a SA stats study indicated that 93% of respondents were extremely concerned about the possibility of the economic collapse of our state. Do look: Reference
Nigerian banking giant Access Bank acquired Grobank last year and is the first outside-of-south-Africa African bank to acquire a banking licence here. Access Bank will provide a full-suite banking offering in South Africa. The fact is that innovative smaller banks have undercut, fee wise, the established banks in South Africa substantially.
When academics start talking tax revolt, one must ask how state service delivery is going to be implemented other than through internal change. Two recent reports deal with just this problem:
municipal taxes are reportedly set to rise by double digits; and
the SABC is casting around for alternative sources of revenue after a report that 76% of users of its services do not pay licence fees.
The further funding of both is going to be problematical. The private sector is reportedly loathe to collect revenues that the SABC cannot and, as far as municipal services are concerned, the term service is increasingly questioned as municipalities fail financially and simply do not provide the services that are paid for by some. In KZN, our capital city, Pietermaritzburg, is said to have a run out of funding and no longer fixes, by way of example, traffic lights. Yet, it is clear for all to see that there are settlements within the city perimeter which are simply not taxed or penalised for non-payment of services, as our city fathers simply do not have the political stomach for the ensuing revolt.
We have some 2078 municipalities in South Africa of which 163 are said to be in financial distress, and 40 of which are not delivering full basic services. Oh yes, and municipal employees want a raise!
Working from home? Two interesting topics have once again surfaced on this front: the first is the tax implications of working from home rather than in the country in which your employer is situate employer is situate; a bit fanciful for most of us, but still: Reference
The second has to do with income tax deductions for home office purposes; to take a look – but read the last bit on CGT: Reference
Whilst on the topic, do look at the definition of a hybrid work model as opposed to working remotely : Reference
When does overtime commence when working from home? Reference
Finally, if you are faced with a compulsory CV19-vaccine-before-returning-to-work policy, look at this: Reference
The Traditional Courts Bill has been dusted off and now contains a clause which makes it compulsory to appear in such courts if summoned: Reference
A recent case, in which a service provider took on a municipality, has provided clarity on the nature of letters of appointment issued by such an entity: in essence it indicates an intention to conclude an agreement, rather than a final contract: Reference
Should you incorporate your legal practice? If funding for growth is to come from income, certainly: Reference
Family trusts on a very basic level: Reference
The Pretoria High Court has ordered the RAF to stop enforcing a practice directive, issued earlier this year, stipulating the terms and conditions under which claims for compensation will be administered.
Fun: the Office of the State Attorney is under investigation by the SIU after having paid a practice R123m over three years to provide medical personnel as expert witnesses. Wait for this.
a strongly worded letter, threatening deprivation of possession, will not found an application for the mandament van spolie: Reference
PAJA requires an application, for the review of an administrative decision within 180 days, unless condonation is applied for and granted: Reference
Section 34(3) of the Insolvency Act provides that a transfer of a business is void against creditors of a trader, if claims had been instituted against the transferor trader before such a transfer: Reference
An invalid ANC gives rise to a claim for damages against the draftor; prescription runs in respect of such a claim: Reference
The mini post-covid residential sales boom is over. The FNB Property Barometer shows that year-on-year house price appreciation is slowing as is the rate of bond applications in respect thereof. Nevertheless, these rates are still above pre-pandemic levels.
On the commercial and industrial fronts, the market is strained and awaits robust economic growth.
“Since the advent of the new law, there has been a great reluctance from many businesses to donate because of disclosure. So, as a result, we have struggled to get money in time as opposed to previous years,”
The ANC’s Paul Mashitile on the organisation’s struggle, to pay staff salaries on time, for some months, owing to cash-flow problems.
The above quote gave me perverse pleasure as, rightly or wrongly, the perception was that the ANC used its political clout to improperly fund itself (remember Chancellor House?). However, no, it is not currently broke, it is merely challenged. Crowdfunding, apparently, is being considered. Presumably, the cash rolls in and no one has to say who donated?
Given this unpleasantness, kudos to the Prez that he seems intent on rooting out malpractices, despite the cost to his party.