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Budget 2016: Gordhan Vows To Assist Small Business

Tertius Troost, Mazars Tax consultant, on Minister Pravin Gordhan giving a helping hand to South African SMEs.

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Tertius Troost

On 9 December 2015, one could not blame every entrepreneur for fearing for the future economic prosperity of South Africa, let alone his business. “Nenegate” and the turn in the United States interest rate cycle resulted in a rapid 15% weakening of the Rand from R14.6/$ to R16.8/$.

The strong US Dollar, slowing of the Chinese economy and the commodity dip, coupled with the devastating effects of El Nino makes economic growth in SA problematic, to say the least. In light of this, the International Monetary Fund expects SA to grow at a mere 0.7% and the ratings agencies put SA one notch above sub-investment grade status (i.e. “junk” status). Not surprisingly, the 2016 Budget Speech was one of Minister Gordhan’s toughest yet. His budget had to address multiple issues and balance the interests of various groups.

Related: The Budget 2016 And Business: Highlights Of Minister Pravin Gordhan’s Speech

Without providing the much anticipated “killer-blow”, as Daniel Silke put it at the Annual Mazars Budget Breakfast on 25 February 2016, Minister Gordhan managed to deliver sound judgement in difficult times.

The most notable tax changes to effect entrepreneurs and their businesses are the capital gains tax (CGT) amendments, individual tax changes, fuel levy increase and other environmental taxes.

CGT

The increase to the individual and special trust inclusion rate from 33.3% to 40% and to the company and other trusts inclusion rate from 66.6% to 80% has resulted in capital gains being taxed at an effective rate of 16.4% for individuals and special trusts, 22.4% for corporates, and 32.8% for other trusts. This reduces the margin for arbitrage in the classification of receipts. Consequently, trying to classify receipts that are income in nature as capital in nature might not provide enough reward for the risk undertaken.

Individuals

Contrary to the norm, a lack of amendments to the tax brackets will provide additional tax revenue to the fiscus. By using the effects of fiscal drag, the Minister expects to collect additional revenue to the tune of R 7.6 billion. In simple terms, the lack of adjustment to the tax brackets will result in any increase in taxable income (pursuant to salary adjustments) in the following year being effectively being taxed at a higher rate and  thus contributing more to the National Treasury.

Fuel levy and other environmental taxes

Fuel-levy-south-africa

In order to make the most of the current oil price Minister Gordhan took the opportunity to further increase the fuel levy. An increase of 30c/litre will be effective from 6 April 2016. Additionally, a new environmental tax will be implemented from 1 October 2016 on motor vehicle tyres. This tyre levy will be charged at a rate of R2.30/kg and is intended to reduce waste and encourage recycling. An environmental levy on incandescent light bulbs was introduced in 2009 to encourage the use of more efficient compact fluorescent bulbs and reduce electricity demand. This levy will be increased from R4 to R6 per globe, effective 1 April 2016.

Related: Budget 2016: Encouraging For SMMEs, But More Detail Needed

Fortunately, it is not all doom and gloom

The South African government acknowledges that if the small business sector grows, the economy grows. However, in order to grow these entities funding and expertise must be provided.

It was therefore encouraging that the Budget Review took the financial situation of the small business sector into account by stating that: “Only 30% of registered small businesses have access to finance. To improve this situation, government plans to introduce a shared business credit infrastructure for small businesses.”

Furthermore, the Budget Review made a renewed call to support business development in South Africa and to reduce the tax compliance administration burden: “The South African Revenue Service (SARS) is working to reduce red tape for especially small businesses.”

Minister-Pravin-Gordhan

Minister Pravin Gordhan

In essence, the Budget Review is aligned with the thinking that as long as South Africa has entrepreneurs, there will be hope. As Minster Pravin Gordhan stated:

“…I know you will join me in acknowledging that the real champions of our development are the… entrepreneurs… who get on with the job, day by day, of managing programmes and running businesses, serving communities and meeting needs.”

For a full feature of budget highlights please follow this link.

Mazars has a long history of professional excellence in South Africa. Our commitment to the care of our clients and their businesses is strongly reflected in the loyalty they show us - some client relationships we have maintained for over 50 years. We provide the same diligent and personal service to everyone we are engaged by as a part of the Mazars group. A versatile blend of personal attention coupled with huge resources and experience positions us uniquely in South Africa. We are a firm with the power and presence to rival the world’s largest accounting firms but with the agility to respond to our clients’ needs quickly and decisively.

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How Lexus Is Emphasising Quality And Taking Craftsmanship To New Heights

The seventh generation Lexus ES is crafted to the last millimetre and is the essence of comfort​.

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The seventh generation Lexus ES ushers in an era of performance, mirrored by design that stirs the soul. The exceptional body rigidity allows for incredible design freedom, resulting in design that has the confidence to stand out. The brave new design that is lower, wider and sleeker, giving this sedan a coupé-like silhouette.

The 2018 Lexus ES range has no space for mediocrity – every vehicle excels and provokes. The petrol ES 250 EX and hybrid ES 300H SE set a standard of excellence with unparalleled levels of sophistication, elegance and performance. The Lexus ES range places all available performance in the driver’s hands for an intimate experience. It is performance that can be heard and felt.

The new Lexus ES has a profile that is impossible to ignore. The striking signature spindle grille is a significant feature, a sculpted form that speaks of inherited architecture and meticulous craftsmanship. It is the embodiment of provocative elegance, of finesse and sophistication.

Every curve builds from the grille. Athletic headlights flow from the spindle grille, emphasising the sleek lines of the three-dimensional front-end while tracing the outline of the lowered roofline.

The Lexus Takumi craftsmen embody the quest for perfection by carefully refining design elements. Boldness is balanced with elegance, and innovative design characteristics are made possible by the new chassis platform that allows the New Generation ES to be longer, wider and more spacious than ever before, but with a sleeker and lower silhouette. The fastback roofline captures the glamour of a coupé and emphasises the low stance, while the interior roominess is all premium sedan.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

lexus-car-interior

The meticulous attention to detail of the Lexus Takumi craftsmen is evident in every inch of the Lexus ES interior. In a physical manifestation of Omotenashi, the Japanese philosophy of warm hospitality where your every need is anticipated and catered for, the Lexus ES offers a personal comfort zone, an escape from the ordinary.

The ES seduces you with details such as embossed stitching on semi-aniline leather-trimmed* seating and real wood trim*. The door panels flow into the instrument console, creating a sense of spaciousness, and at the same time placing all controls of the navigation*, Multi-information and entertainment systems within your grasp, while all driving related functions, as well as those for communication, are controlled from the leather-trimmed steering wheel.

Define your own personal climate with automatic dual zone climate control. The innovative nanoe air-purifiers cleanse the air and moisturise your skin, which is why stepping out of the new Lexus ES, is just as invigorating as stepping into it.

For further individual comfort, the front seats of all ES models have adjustable lumbar support, with standard heated and ventilated seats.

At Lexus safety is of paramount importance, which is why the new Lexus ES features the most advanced passive and active safety and driver support systems available. This is the most technologically advanced Lexus ES ever, with traditional measures of comfort merged with cutting-edge technology for all-encompassing driving pleasure.

* Available on ES 300H only

Read next: 10 Dynamic Black Entrepreneurs

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Rethinking Learning In The 21st Century

The changing world of work has disrupted the three elements of the traditional ‘career’: Expertise, duration, and rewards.

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Traditionally the concept of a ‘career’ was considered to include three elements:

  1. A career represented our expertise, our profession, and ultimately our identity.
  2. A career was something that built over time and endured. It gave us the opportunity to progress and advance.
  3. A career gave us financial and psychological rewards. It made life meaningful and paid us enough to live well.

The changing world of work has disrupted all three elements: Expertise, duration, and rewards.

A career can now be as long as 60 years; at the same time, due to rapid advancements in technology and the changes that bring about in the workplace, skill sets can become obsolete in as little as five years.

Increasingly, companies need to rethink the way in which careers are managed and learning opportunities are delivered, and many have already begun to overhaul their career models and L&D (Learning and Development) infrastructure in line with the digital age.

Related: Your Investment In Knowledge

Employees’ learning behaviour is also changing. In the past, employees were able to obtain the skills required for their career early on and as a once-off; now, the career itself is a journey of learning, up-skilling, re-skilling and continuous reinvention to remain relevant and to thrive in the changing world of work.

Older employees who studied at a time where most of one’s learning occurred prior to entering the workplace, find themselves working alongside millennials who place greater value on learning and progression rather than on earning potential as a first priority.

Eighty-three percent of the respondents surveyed in Deloitte’s 2017 Global Human Capital Trends survey say their organisations are shifting to flexible, open career models that offer enriching assignments, projects, and experiences rather than a static career progression.

However, in today’s fast-paced business world, even if companies are restructuring L&D delivery, no one is going to make you engage in a strategy that is essential to your future success – continuous learning. You will have to take the initiative yourself.

Noted self-help expert W. Clement Stone, in his many writings on this topic, recommended that one spends anywhere from a half-hour to two hours a day in study and thinking time. This tireless dedication, combined with an insatiable curiosity, will equip you to excel in the future world of work. What’s more, learning new skills and knowledge can be fun!

The good news for both companies and for employees is that an explosion of high-quality content and digital delivery models offers employees ready access to continuous learning. The Wits DigitalCampus offers a range of accredited and fully online short courses to support your continuous learning.

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Your Investment In Knowledge

When you understand the value of knowledge, in this world where technology is rendering previously expensive products or services much cheaper (and even free), it’s just a matter of getting more of it. Dedicate yourself to constant learning!

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Most people spend their lives collecting, spending, and worrying about money — so much so, in fact, that they say they “don’t have time” to learn something new.

However, some of smartest and busiest people in the world — Barack Obama, Warren Buffet and Bill Gates — all spend at least one hour a day on deliberate learning. They see what others don’t: That learning is the single best investment of our time that we can make. As Benjamin Franklin said long ago, “An investment in knowledge pays the best interest.”

When you understand the value of knowledge, in this world where technology is rendering previously expensive products or services much cheaper (and even free), it’s just a matter of getting more of it. Dedicate yourself to constant learning!

One of the very benefits of ongoing technological advances is that it empowers an accelerated and personalised learning experience that puts the learner in the driver’s seat. Modern learning harnesses the speed, power and ubiquity of digital capability. Online platforms, software and mobile devices means that the traditional hurdles to learning — such as income, status and location — have just about disappeared. Knowledge can now be gained by anyone with the passion to pursue it and the commitment to stick with it.

Related: Building Customer Relationships

We are only at the tipping point of what future learning technology can deliver. Artificial intelligence (AI) will transform all aspects of human capital management, including learning. Technology-enabled learning will be immediate and directly relevant to the task, for example:

  • personally tailored learning content and experiences delivered to you as and when you want or need them
  • chatbots and virtual assistants can source and categorise the information that you need for optimal decision-making
  • augmented and virtual reality simulations can provide a multi-sensory experience to speed up and embed learning.

Additionally, social connectivity already enables user-generated content to outpace and outstrip what traditional education and learning institutions can deliver.

Knowledge may be the new money but, unlike money, you don’t lose it when you use knowledge or give it away. Transferring knowledge anywhere in the world is free and instant. It’s fun to acquire and it makes your brain work better. It helps you think bigger and beyond your circumstances. It puts your life in perspective by essentially helping you live many lives in one life through other people’s experiences and wisdom.

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