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Five Lessons For Young Leaders

The Make A Difference Leadership Foundation Annual Leadership Summit wrap up.

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The Annual Leadership Summit is a significant leadership milestone of the year. The purpose of the Summit is to present an annual theme that flourishes competencies such as leading ethically, being strategic and innovative, development, communication and mindfulness. Additionally, it refines skills such as: integrity, courage, authenticity, social consciousness, conflict resolution, solving problems, right planning and building purpose.

The objective of doing so is to place our scholars in situations portraying the theme to provide challenging milieus, in order to step out of their comfort zones, learn to lead with integrity, to think critically, share their truth, recognise their individualised leadership style, contest content and each other, and to reflect on challenging issues.

This year’s Annual Leadership Summit focused on the theme of strategy and innovation. Throughout the week at Spier Wine Farm Conference Centre we were privileged to have several speakers touching on their own personal journeys to leadership and how strategy and innovation influenced that journey. With keynote speakers such as our Founding Chairman – Francois Pienaar, David Duarte, David Brown, Lethabo Motsoaledi and Carrie Leaver and our facilitators – Russell Raath: President of Kotter Consulting and a Member of the Senior Leadership Team and Rudi Buys: Dean of Humanities at Cornerstone Institute; our scholars’ curiosity and leadership dialogue was sparked. Although each speaker and facilitator had their own unique stories there were five messages that were consistent throughout all speakers.

These messages are as follows:

1. Identify your risk tolerance

In any given situation you are faced with the decision on how you react. Russell Raath discussed the concept of the freeze, flight or fight reaction. This concept focuses on the three types of reactions you have to any situation you are faced with (particularly when faced with risk). You have the opportunity to freeze from fear, run away from the situation and take flight or to fight and face the situation head on. It is important to identify what your immediate reaction is.

This will give you the ability to actively acknowledge this reaction and then decide how you want to respond. People will always act based on the way that you make them feel, remember to act the way that you want the people around you to feel.

Related: MAD Leadership Skills: Our Perspectives

2. Build your network

As a future leader it is important to acknowledge the people that walk with you on your path to leadership. This community of people are not only your support system but your inspiration and are often the people that you aspire to be one day. It is at this point that you should look at your closest network of people. Are these people acting the way that you want to be perceived as a leader?

It has been said that you are the sum total of the five people you spend the most time with. This concept was reinforced by almost every single one of the speakers at the Annual Leadership Summit. It is important to befriend people who have achieved things that are beyond your scope of capabilities.

These are the people that will encourage you to do more, be more and achieve more. David Duarte mentioned that every person you meet; you meet for a reason. Each and every person you meet has the potential to impact your life. Focus on building a network of people that you want to be associated with, that motivate and inspire you and that you build a mutually beneficial relationship with.

3. Hold onto your nuttiness

It is a general assumption that leaders have no “nuttiness”. Rudi Buys discussed this assumption with our scholars and encouraged them all to hold onto their nuttiness. In your leadership journey you will constantly be faced with the challenge of being original. Hold onto your nuttiness throughout all the challenges that you will without a doubt be faced with, because, your nuttiness will be your originality.

The one thing that no leader before you have, is the parts of you that make you unique.

4. Find your why

On your path to becoming a leader you are going to be faced with challenges but once you take on the role as a young leader you will be faced with many more. This is because when you make the decision to tackle a problem you realise that you are faced with a thousand other challenges that you wouldn’t have faced if you had just ignored the problem in the first place. Although these challenges and/or failures may make you feel like giving up they are in fact an indispensable part of your leadership journey.

These challenges can bring you down and make you feel incapable and that is why it is vital to identify your “why”. This is the one reason that you are doing what you are doing. This is the motivation that you can turn to when everything else falls away. Your “why” is the reason you will never give up.

Related: Five Lessons In Leadership From Someone Younger Than 25 Years Old

5. Always listen to your user

We have all heard the saying that the consumer is always right. As a leader this could not be more true. You will have to continuously listen to your users to identify the areas that need to be changed in order to make a difference that will matter to them. It is essential for you to understand the problem from their perspective. You need to delve into their worlds and look at the problems that they face every day. This is the only way that you will be able to identify solutions that will make a difference to the end-user.

We hope that these lessons have resonated with you and that you can implement them in your own personal journey to leadership. We would like to close with a quote from the Founding Chairman of MAD Leadership Foundation, Francois Pienaar:

“I follow the philosophy of the four D’s: Desire, Dedication, Determination and Discipline.”

Ask yourself these questions:

  • Desire – What is your burning desire, that keeps you awake, that excites you?
  • Dedication – What are you committed to?
  • Determination – Ask yourself, why? Why do you believe in this and why are you doing it?
  • Discipline – You have to do whatever it takes to achieve your desire. Nothing can be too much to achieve your goals.

“With this in mind. You have to decide if you are a critical thinker or a group thinker. Critical thinkers speak up. They speak up for what is right, and what needs to be addressed. Give yourself time to be a critical thinker, to think about yourself, your family, your community, your country and the world. You are Madiba’s children, and we are here to make a difference.”

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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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Entrepreneur Today

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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