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67CEOs To Host Global Entrepreneurship Week 2018

The Global Entrepreneurship Network operates a platform of projects and programs in 170 countries aimed at making it easier for anyone, anywhere to start and scale a business.

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With the National Development Plan (NDP) estimating that SMMEs will generate a whopping 90% of the 11 million new jobs expected to be created in South Africa by 2030, the rate of established businesses currently sits at a low 2.2%, with a high unemployment rate marked at 26, 7%, remaining unchanged throughout the first quarter of 2018 as compared to the last quarter of 2017.

The ‘triple challenges’ often referred to, when addressing the high levels of poverty, inequality and unemployment (non-inclusive economic growth), which have been classified as major features of many developing countries, particularly in sub-Saharan Africa; the time to actively and intentionally advance inclusive ecosystems could not have come any sooner, especially when looking at enterprise development level, which we need, in order to fast-track the development and establishment of SMMEs and entrepreneurs that can create much need jobs.

The 67CEOs Foundation will host the second edition of its Global Entrepreneurship Week programme, themed “Advancing Inclusive Ecosystems”, which is free and open to the public. The organisation, which provides mentorship and impactful entrepreneurship workshops to newly-established industrialists and SMMEs in partnership with CEOs and seasoned entrepreneurs who volunteer their skills in service to inspire, mentor, coach and teach, will hold events as part of the Global Entrepreneurship Week from 12-16 November 2018. The annual programme will engage in impact focused entrepreneurial activities and connect SMMEs to potential collaborators, mentors, policymakers and even investors.

Related: 5 Different Types Of Businesses

“For us as a nation to see high-growth businesses emerge and thrive, the entrepreneurship ecosystem must be inclusive at all socio-economic levels. Public and private institutional policies and support should be designed and executed so they close historical gaps, alleviate poverty and create sustainable employments,” says Sam Apata, convener of 67CEOs Foundation.

Headed by Sam Apata, 67CEOs Foundation is an independent, South African registered, non-profit organisation that hosts GEW initiatives annually. In partnership with title sponsor, Exxaro Resources, 67CEOs Foundation will host over 500 SMMEs during GEW 2018 at Workshop 17, 138 West Street, Sandton from 9:00am – 3:00pm.

“We operate in an environment of vast inequality, poverty and unemployment, and we are mindful of the fact that we can only bring about change if we all work together.  That is why we are delighted to partner with 67CEOs Foundation to help nurture small and medium sized businesses.

“Exxaro believes that unless we can power better lives for people, then we have not lived our purpose. Exxaro will lead economic transformation by investing in black youth owned small businesses that will create jobs in host communities and beyond,” says Mxolisi Mgojo, CEO of Exxaro.

Some of the key activities during the 67CEOs Global Entrepreneurship Week are: workshops, seminars, pitching sessions, speed mentoring and demo day. CEOs/mentors/facilitators will participate in panel discussions and lead relevant workshops focusing on advancing inclusive ecosystem that encourage entrepreneurship and job creation in South Africa.

With the support of corporate entities to deliver its mandate to advance inclusive entrepreneurial ecosystems and increased economic inclusion while expanding financial and human capital for SMMEs; 67CEOs prides itself on creating avenues that seek to support, carry and advance ecosystems for budding entrepreneurs that continue to face systemic barriers to economic empowerment and independence.

Related: Three Things You Need To Do When Starting A Business

Recognised by GEN Africa, the African chapter of Global Entrepreneurship Network based in Johannesburg, 67 CEOs is one of many event organisers during Global Entrepreneurship Week in Africa.

Agenda

Monday 12 Tuesday 13 Wednesday 14 Thursday 15 Friday 16
67CEOs Ecosystem Connect: Engaging Local municipalities, cities, provincial, national and private sectors in collaboration 67CEOs Women: Inspiring Entrepreneurs + Investors 67CEOs Inclusion: Minimising Barriers + Maximising Inclusion 67CEOs Youth: Shaping the Next Generation of Entrepreneurs 67CEOs Pitching and Mentorship: Business model, Idea challenge + Demo day

There will be parallel masterclass sessions on SMME Financial Management, Business Model Canvas, BBBEE Compliance and Access to ESD, 4th Industrial Revolution, Leadership, and Emotional Intelligence.

“SMMEs are invited to join great leaders in business at 67CEOs GEW2018. This is a great platform for education, inspiration, reflection, celebration, dialogue, networking and investment. Come and acquire the right knowledge that will position you for success in 2019 and beyond,” says Apata.

The Primary Spokesperson for 67CEO’s Foundation, Prinesh Pillay can be contacted on 083 607 8942.

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3 Stealthy Tax Hikes Payroll Managers And Employees Need To Take Note Of

By Rob Cooper, tax expert at Sage, and chairman of the Payroll Authors Group of South Africa

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“Dammed if you do and dammed if you don’t.” 

The adage summarises the difficult decisions government and the Finance Minister faced when balancing the country’s books, rescuing state-owned enterprises, and reviving the growth of our economy. Given the economic pressure that most taxpayers are facing, government ideally needed to achieve all of that without direct increases to personal income tax in the most recent Budget Speech.

Personal income tax has comprised at least a third of South Africa’s total tax revenue in recent tax years, despite growing unemployment. The 2019 Budget, presented in February, forecasts that personal income tax will account for nearly 39% of tax collected during the upcoming (2019/20) tax year. Given that we are in an election year and that the tax base is fragile, it’s not surprising that the Finance Minister and the National Treasury avoided direct increases to the statutory tax tables used to calculate PAYE for employees in the budget.

Nonetheless, government has made inflation work in its favour to impose some tax increases by stealth. Here are three ways government is raising more revenue without direct tax increases:

1. Bracket creep

The statutory tax tables used by payrolls and employers have not been changed for 2019/20, nor have the brackets been adjusted for inflation. This effectively amounts to an indirect tax increase that will yield a revenue saving of approximately R12.8 billion for government’s coffers.

It is not unusual for government to use ‘bracket creep’ to effectively raise more revenue. But unlike previous tax years, even low- and middle-income earners are not getting much relief. Rebates and the tax threshold are being increased by small amounts to allow some relief, but many people this year will feel the pain as inflationary salary increases push them into a higher tax bracket.

2. Medical aid credit not adjusted for inflation 

As proposed in the 2018 Budget, the Finance Minister did not apply an inflationary increase to the Medical Tax Credit, which allowed him to raise an extra R1 billion in revenue for the year. Surprisingly, these funds will be allocated to general tax revenue rather than ring-fenced for healthcare. In previous tax years, revenue generated from below-inflation increases on medical scheme credits was used to fund National Health Insurance (NHI) pilot projects.

There is still no clarity on how the NHI is going to be funded except for a general statement that the funding model is a problem for the National Treasury to solve, and that the principles of cross-subsidisation will apply. One wonders if any real progress will be made soon, given the fiscal constraints government faces.

3. Business travel deduction left untouched

The Budget leaves the per-kilometre cost rates used to determine tax deductions for business travel untouched. By not increasing travel rates to account for inflation, government effectively increases income tax collection at the cost of the taxpayer. This will be a blow for people who need to claim from their employers for business travel in their personal vehicles. This change has slipped through largely unnoticed and the budget does not provide numbers for the expected increase in tax revenue.

Closing words

Amid political turmoil and uncertainty, the Finance Minister presented a balanced budget for 2019/20 that offers hope for the future along with some tough love. With government taking steps to accelerate economic growth and improve revenue collection, we should hopefully see a steady improvement in government finances, which will translate into less pressure on the taxpayer in future years.

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SMEs: Staying On The Right Side Of The Taxman

Remaining SARS compliant can be a constant challenge for small- to medium-enterprises (SMEs), especially when they are trying to focus on growing their businesses and streamlining their operations.

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EasyBiz Managing Director, Gary Epstein, says submitting taxes can be a seamless process that does not have to take up more time than is necessary. “If business owners understand what is required of them and they put a few processes into place to deal with their tax submissions properly, their lives will be so much easier.”

What are the top three considerations for SMEs when submitting tax returns?

“Firstly,” says Epstein, “SARS returns must be accurate and submitted in terms of the relevant Act. Secondly, returns should be submitted and paid on time to avoid unnecessary penalties and interest, and thirdly, business owners must follow up on queries issued by SARS. “Do not ignore these queries, act on them as soon as possible”.

What are the major SARS submission deadlines for SMEs?

Epstein points out that small business owners need to adhere to various tax deadlines, each with their own particular dates for submission. “It is important that business owners diarise the dates (and set advance reminders for themselves) and/or enlist the services of an accountant or financial adviser to help them keep abreast of requirements.”

Value-added tax (VAT)

VAT payments need to be submitted in the VAT period allocated to the business, according to various categories and ending on the last day of a calendar month. This may mean making payments once a month, once every two months, once every six months or annually, depending on the category.

Provisional taxes

Provisional tax should be submitted at the end of August (first provisional) and at the end of February (second provisional) – for February year-end companies.

Employee taxes

In addition to submitting an annual reconciliation (EMP501) for the period 1 March to end of February for Pay-As-You-Earn (PAYE), Skills Development Levy (SDL) and Unemployment Insurance Fund (UIF), employee tax, in the form of an EMP201 return, needs to be submitted by the seventh of every month.

When can SMEs get extensions and is it worth it?

Epstein says SMEs can apply for various extensions, but these are subject to the Income Tax Act and Tax Administration Act.

“It is best for SMEs to consult their tax professionals to get advice regarding extensions for their businesses.”

What is SARS not flexible about?

SARS is not flexible when it comes to late returns and late payments.

“I cannot stress enough how important it is for SME owners to ensure their tax returns are submitted on time. In this way, they will avoid the inconvenience and expense of additional fines and interest,” notes Epstein.

What skills do SMEs need in their organisations to be able to submit to SARS efficiently?

Business owners often don’t have the time or expertise to deal with tax submissions throughout the year. If the business cannot afford to employ a full-time accountant or financial services expert, it would do well to outsource its tax requirements to a registered tax practitioner.

“I would recommend that even if they are not submitting the tax returns themselves, business owners should have a broad understanding of the tax regulations and what is expected of them. There is a lot of helpful information on the various Acts and tax requirements on SARS’ website,” says Epstein.

How does the right software help SMEs remain SARS compliant?

SME’s (and their accountants’) jobs can be made easier by using reliable accounting software to calculate accurate VAT reports. These reports are only as accurate as the data entered into them, which means care needs to be taken when inputting data into the accounting programme. Epstein says a good accounting software package must be reliable, easy to use and functional.

“SMEs need to check that the software has thorough reporting capabilities and can interface with other software solutions. Of course, it is also important to find out whether the software is locally supported by the vendor or not.”

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4 Dangers Of Business Under-insurance

A common short-term insurance peril that many SMEs face when submitting a claim following an insured event is the risk of being underinsured.

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Malesela Maupa, Head of Products and Insurer Relationships at FNB Insurance Brokers says, many small business owners mistakenly believe that by merely having a short-term insurance policy in place they are adequately protected against unforeseen events.

“This is technically correct provided that the business is covered for the full replacement value of the items insured. However, in circumstances where the sum insured does not cover the full replacement value or material loss of the item insured, the business is underinsured,” explains Maupa, as he unpacks the dangers of business underinsurance:

1. Financial loss

The most common risk is financial loss on the part of the business. If the business is underinsured or the indemnity period understated, the short-term insurance policy will only pay out the sum insured for the stated indemnity period as stated in the schedule, with the business owner having to provide for the shortfall. This often leads to cash flow challenges, impacting profit margins or rendering it difficult for the business to recover following the financial loss.

2. Reputational damage

Should an underinsured business not have sufficient funds to replace a key business activity or critical component following a loss, this may impact its ability to fulfil its contractual obligations, leading to a loss of business or market share, and irreparable reputational damage in the worst-case scenario.

3. Legal action

A small business also faces the risk of customers or clients taking legal action against it, should it fail to deliver on goods and services following a loss or be unable to honour its financial commitments that they committed to prior to the loss.

4. Survival of the business

A catastrophic event such as fire, which could result in the loss of stock or company equipment and documentation, could threaten the survival of a small business that is not yet fully established, if the business assets are not adequately insured.

Working with an experienced short-term insurance broker or insurer is essential when taking up short-term insurance to ensure that business contents are covered for their full replacement value.

Furthermore, depending on the nature of the business or item insured, the policy should be reviewed on a regular basis to avoid underinsurance as the value of items often change overtime due to fluctuations in economic activity. Where it’s necessary, evaluation certificates need to be kept up to date.

“Lastly, SMEs should ensure that the sum insured does not exceed the replacement value, which would lead to over insurance. Should a business submit a claim following a loss, the insurer would only pay out the replacement value, regardless of the higher sum insured,” concludes Maupa.

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