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Insights Of A Highly Successful Venture Coinist

The Matt Brown Show, in association with CNBC Africa and social trading platform, Etoro, flew the wildly successful cryptocurrency trader, Luke Martin, AKA Venture Coinist, from the United States to take part in the show’s sixth live (and sold-out) cryptocurrency podcast.

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The Matt Brown Show has built a listenership and captive audience in over 100 countries around the world. #CryptoJHB was the first podcast event to trend in the #1 hashtag position on Twitter in the history of South African media.

CNBC Africa broadcasted a section of The Matt Brown Show, through their programme #CryptoTrader, Hosted by Ran Neu-Ner. The Matt Brown Show tapped into Martins’ deep insight into the cryptocurrency landscape and interrogated issues such as the move from Bitcoin to alternative cryptocurrency (altcoins), the Initial Coin Offering (ICO) frenzy, how he makes his investment decisions and anonymity coins.

Matt Brown says Martin is known for his uncanny ability to read the cryptocurrency market. “Luke has more than 100,000 followers on Twitter. I strongly advise anyone who is serious about cryptocurrency trading to follow him if they are not doing so already.”

Discussing the move from Bitcoin to altcoin, Martin said investor psychology is an important consideration, especially the psychology of people getting into crypto trading late. “Various coins that have been hailed as ‘the next Bitcoin’ attract investors looking for a cheaper coin that will allow them to earn a higher multiple.”

Related: Everything You Need To Know About Podcasting But Were Afraid To Ask

Martin says while the ICO frenzy – where some tokens launch at 50 or 100 times their money – might be a bubble, it might not necessarily be a bad thing. “Good things can emerge from it. The massive fundraising is going to back projects that will disrupt other industries. Of course, we will continue to see corrections of 30%, 40%, 50% or even greater. After all, we’re dealing with a hyper-volatile asset here.”

Looking at the bigger picture, Martin believes the total market cap is going to continue to go up. “Looking at where gold is – at $6-trillion – we are only at about $800 billion. So, relatively speaking, we are still pretty small.”

Talking about how he makes investment decisions, Martin says he thinks of everything in macro terms. “Where a lot of guys dive into projects and wonder if they should invest this or that coin, I go onto the website and do my homework. I like to think of things in terms of the entire market. I also think of them in terms of sectors. Notably, three sectors I am most interested in investing in are: smart contract platforms or protocols (the infrastructure for the cryptocurrency space); privacy coins; and decentralised exchanges.

“Once I have a sector picked out – let’s say decentralised exchanges – I look at it closely. I like to establish who the biggest players are and who have the most potential, healthiest projects and strongest teams (incidentally, I think it’s ZeroX – they have the most activity going on in their ecosystem). And then, maybe I look smaller. If I’m looking to take a larger risk, I may look at a coin that has a smaller market cap, such as Kyber.

Asked to elucidate on the difference between decentralised exchanges and bitfinex or bifinance, Martin says the greatest difference is the level of security. “Right now, exchanges are a centralised point of failure for the entire system. The appeal of cryptocurrency is you are your own bank.

“When you keep your Bitcoin on one of these exchanges and the exchange goes under or gets hacked, all your cryptocurrency is gone. A centralised exchange allows you to connect via a centralised system and exchange tokens in that way. Your money is never tied up in an exchange – it’s always in your own wallet or a smart contract.”

Related: [PODCAST] An Inside Man On How To Disrupt The Banking Industry

Martin is bullish about ZeroX, which was recently listed on Bitfinex, getting a high valuation. “There are so many different projects being built on top of ZeroX. It has a really healthy ecosystem of teams already adopting that protocol.

“Most decentralised models have more than one development team working on it. My advice is to evaluate the strength of the development team that is building around something like ZeroX, check their activity on Twitter and their community. It’s important to see there is ongoing communication.

On anonymity coins, Martin says some believe the block chain in its current format is anonymous. “This is not really the case – it’s halfway anonymous in the sense that your name attached to your bank account. However, all the tokens are traceable. Understandably, most corporations don’t want their bank account credit online. Also, some organisations have amazing trading terms and they don’t want their competitors to see when they pay the money or how much they get paid.”

Martin’s top three anonymity coins are Monero (which has the largest network; is a truly decentralised project; and doesn’t rely on a single developer, ZCash (which is a bit more risky); and ZClassic. Investors need to be aware there are a lot of Z’s when it comes to privacy coins, but they are not the same,” he says.

When asked how staking coins works, Martin says if investors hold their coins in a wallet, they are pretty much earning interest in the form of more coins. “So, if you’re holding 1 000 ZCoins and you are running a ZNode, you are paid every time a block is found.

In Neu-Ner’s words: “They are making the assumption that if you own the coins, you belong to the network and are therefore a contributor to it. You are rewarded with an ‘interest’ payment, or a dividend related to what the network is making.”

The conversation turns to interoperability challenges. “Interoperability is a kind of decentralised exchange combining a few different things. We’ve already seen network congestion happen with Bitcoin and Etherium, amongst others. These chains aren’t able to interact with each other yet. It would be huge if they could, but right now there is not conversion metric that can take you from the lite network into the Bitcoin network or from the Bitcoin network into the Etherium network.

Related: 5 Answers From Digital Kungfu On Why Podcasts Are Your Best Self Development Tool

For people looking to invest in ICOs, Martin recommends an objective, systematic approach that follows some set of rules. “A friend of mine pioneered a technique of putting the ICOs onto a spreadsheet and breaking them up into categories such as team and qualitative, token metrics, market cap and total supply, amongst others. The next step is to score them before making a decision.”

One recommendation Martin gives to everyone is to split their positions between trades and investments. “Whether they choose to hold two separate portfolios is up to them, but knowing the time horizon that they want to be a particular position is important. With something like ZClassic, the time horizon is really just to hold until the fork. ZRX, on the other hand, is a decentralised exchange where they may want to be positioned and could therefore be regarded an investment.”

A final word of advice from Matt Brown is: “If you understand this space and know how to make great trading decisions, it can really change your life. Attending conferences such as these and following leaders in the cryptocurrency arena can help inform your trading and investment decisions.”

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Entrepreneur Today

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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