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Lack Of Awareness Around Legislation Putting Businesses In South Africa At Risk Of Data Breaches

Report by leading information security company Shred-it reveals that South African businesses are struggling with information and data security.

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More than three-fifths of small and medium enterprises (SMEs) surveyed and a third of larger organisations in South Africa surveyed believe the Protection of Personal Information Act (POPI) does not apply to their business raising concerns that there is a gap in basic information security knowledge across the country, a leading information security company said today as it launched the first South Africa State of the Industry – Information Security report.

The survey, conducted by research body Ipsos on behalf of Shred-it, highlighted a lack of awareness among SMEs and C-Suite organisations about the legal requirements around storing and disposing of confidential data outlined in the POPI Act partially enacted on 11 April 2014.

Related: Cyber Security a Growing Issue for Small Business

According to the findings, C-Suite Executives (70%) are more likely than SMEs (37%) to understand the implications the POPI Act has on their business. Although the POPI Act is yet to be fully implemented, once it comes into force businesses are given a grace period of just one year to comply. If the Act is not adopted after this time, organisations could face financial penalties of up to R10 million or a prison sentence of up to 10 years could be imposed.

Nearly half (46%) of C-Suite Executives and one-third (32%) of SMEs say the POPI Act will put pressure on their organisation to change their policies related to information security. Despite this, one-third (32%) of SMEs say they currently have no protocol for storing and disposing of confidential data. By contrast, C-Suites Executives are more likely to have policies in place with over half (57%) saying they have a protocol that is strictly adhered to by all employees. However, a further third (37%) with a policy in place admit that not all employees are aware of these protocols. This highlights a worrying gap in knowledge for employees resulting in personal information potentially being compromised as they are unaware of how to correctly protect, process and securely dispose of data.

Businesses can increase security by implementing a Clean Desk policy, which means all information must be secured, for example in a locked drawer, when an employee is away from their desk, and a Shred-it All policy, which means that all office paperwork is destroyed before being recycled so that employees do not need to make a decision as to what is or is not confidential. Some companies have already responded to these security risks, with 80% of C-suites and 64% of SMEs stating that they have a Clean Desk policy in the workplace.

Related: Is Your Business Being Pickpocketed Online? 5 Vital Answers about Cyber Crimes

Commenting on the findings, Tom Bell, Regional Manager, Shred-it South Africa, said, “Understanding the legislative environment is crucial for businesses in South Africa to ensure they are implementing best practices to safeguard the confidential information of their customers, employees and partners. However, our Security Tracker results show that organisations are not prioritising this, nor are they putting policies in place to help employees understand how to securely store and dispose of sensitive data. By neglecting to put policies in place, businesses are at serious risk of a data breach, which causes significant legal, financial and reputational harm.”

The Security Tracker results also indicate a need for Government to take action and help South African businesses to understand their information security priorities. Both C-Suite (47%) and SMEs (55%) say the South African Government’s commitment to information security needs improvement.

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Other Key Findings from the Security Tracker:

  • Almost all C-Suites Executives (89%) and almost three-quarters of SMEs (73%) questioned say they have employees using flexible/off-site working models. Despite this, only 53% of C-Suite Executives have a policy in place for disposing of and storing confidential information both off-site and at home, while this is lower for SMEs (32%), therefore highlighting a policy gap and potential data breach risk for businesses.
  • Just half of C-Suite Executives (55%) and SMEs (51%) say client/customer information would threaten the stability of their organisation in the event it was stolen, which is concerning as this information is often confidential and the loss of this data could cause significant legal, financial and reputational damage. Likewise, only 37% of C-Suite Executives and 22% of SMEs note that the theft of HR/Employee information would be damaging, despite the fact that this often contains highly sensitive personal information about individuals, highlighting a lack of knowledge from South African businesses around what information could put them at risk.

Related: 10 Steps that Could Save your Business from a Cyberattack

These results clearly show that many businesses in South Africa are struggling with information security putting confidential information at risk. Organisations, in particular SMEs, need to recognise that they may need to turn to experts for counsel, whether that’s Government bodies responsible for information security or an information destruction service provider.

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Bitcoin Family Of Coins – Who Will Win?

Off the back of 6 sold out live events, and after successfully hosting the biggest #Cryptocurrency event ever held in South Africa, the Matt Brown Show is holding a one-time exclusive learning and networking event in Johannesburg on Wednesday, 7 March (6pm – 8pm) we’ll be launching a deep dive series into alternative cryptocurrencies.

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The interest around cryptocurrencies, with Bitcoin being the most famous, has continued to capture headlines worldwide whilst regulators around the world are still struggling to formulate a plan to deal with it.

The Matt Brown Show #cryptokungfu is kicking off its first edition of a deep dive series will be looking at the bitcoin family of coins, what makes the coins different, their utility and the opportunities for traders and investors.

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.

Related: 11 Things You Need To Know About Bitcoin

The Matt Brown Show Johannesburg event taking place on Wednesday, 7 March 2018 from 18:00pm to 20:00pm, now being hosted at the Mesh Club in Rosebank will tap into THREE of the world’s leading experts for this first edition of a deep dive series focused masterclass.

The Masterclass will feature Tone Vays (via video conference) and Adam Meister from the United States, both regarded as world’s leading Bitcoin experts. Lorien Gamaroff, founder/CEO of Bankymoon, blockchain and cryptocurrency consultant will provide the local market perspective as a South African.

The masterclass has been engineered to provide a more focussed and intimate discussion on the landscape, which is one of the reasons the event was moved to the mesh club. To provide a more exclusive and engaging atmosphere for the attendees.

Matt Brown says, “these 3 experts have the uncanny ability to read the cryptocurrency market and are considered part of the top 100 most influential people in blockchain/cryptocurrency space in the world”.

“So we need to look beyond the recent surge in bitcoin investors across Africa, businesses have also started to embrace the cryptocurrency. It no longer a fad but a reality of the world we live in today” says Brown.

South Africa continues to lead the way, with businesses now starting to accept bitcoin payments.

Gamaroff says, “The global financial system is crumbling. People are seeking alternatives to fiat money. Cryptocurrencies will be their hedges against the cataclysm that is coming.”

Related: Embracing Technology For Business

“The reality is that Bitcoin is here to stay and, with many seeing a good return on their investment in cryptocurrencies, they now want to use this digital cash to invest in their future” says Brown

“Today, South Africans are using the ease of online trading to make money that they can then reinvest in a future beyond the world of forex. Which is why we continue to see the demand for events like this, being attended by a mixture of cryptocurrency enthusiasts and/or people simply interested in learning more about this space.” Concludes Brown.

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The Workspace And MiWay Announce Entrepreneur Competition

To celebrate their collaboration at Village Road, The Workspace and MiWay are launching a competition for South Africa’s entrepreneurs that will see the winner/s given a major advantage to further grow their business.

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Space solutions and coworking specialist, The Workspace, and insurance company, MiWay, recently joined forces at The Workspace’s premises in Village Road, Selby where they have launched an entrepreneurial hub and business development programme in the Johannesburg CBD.

The competition is open to entrepreneurs based in South Africa who have valid identification documents, who run a business with four or less employees and are making an impact in their industry.

“We have always believed in assisting entrepreneurs and small business owners who are members of The Workspace community in whatever way we can. This entrepreneur competition takes it to the next level, giving a voice to our belief in entrepreneurship and its ability to create jobs,” says Mari Schourie, CEO of The Workspace.

Related: 6 Resources For Start-ups Looking For Funding

Morné Stoltz, head of Business Insurance at MiWay, says both companies are committed to upliftment initiatives and economic development. “The entrepreneur competition is a call to action to those vibrant entrepreneurs out there. Start-ups always need a bit of a hand-up and the winner of this one will have a serious advantage once the competition has gone through its paces,” he said.

Schourie and Stoltz agree they’re looking for an entrepreneur who has reinvented the way business is done in his/her industry. “Someone who has been innovative in the product or service being offered to the market,” says Schourie.

“We are looking for an entrepreneur who has or is busy creating a special environment where employees can flourish, and in the process, potentially creating more jobs,” Stoltz adds. “An entrepreneur who makes an impression on the judges due to aspects such as the business’ social impact, attitude, positive entrepreneurial outlook and a good business mind”.

Related: 4 Tips To Secure Funding For Your Start-up

The prize on offer – worth over R230 000 – will help set-up the winning entrepreneur for a period of 12 months, giving them a boost to help build their business.

All information on the Entrepreneur Competition is available on The Workspace website, including criteria, terms and conditions, and of course, the prizes.

For queries, please email events@theworkspace.co.za

Download the competition criteria here.

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Budget 2018/9: 3 Key Tax Areas To Look Out For In The Speech

High political drama in the opening weeks of Parliament aside, most South African business and personal taxpayers are expecting tax hikes across the board from the Finance Minister’s Budget Speech on 21 February.

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As we approach #Budget2018 day, Rob Cooper (tax expert and Director of Legislation at Sage, and chairman of the Payroll Authors Group of South Africa)has a few thoughts about what the Minister could clarify in his statement.

Government already faces a yawning budget deficit, aggravated by the need to find billions of rand to fund a new and unbudgeted-for commitment to free tertiary education.

While some spending cuts could help to release funds, we can expect a one to two percentage point increase in VAT, steep hikes to fuel levies and sin taxes, higher capital gains taxes, and perhaps even personal income tax hikes for high income earners.  We’re also likely to get more info on new taxes such as the carbon tax.

Personal taxpayers, with the exception of low-income earners, should probably not expect the Finance Minister to adjust personal income tax brackets and rebates to fully cater for the effect of inflation. In other words, even if your salary is worth less as a result of inflation, you should probably not be hoping for your effective tax rate to come down to compensate.

Here are three other things I’m looking out for in this year’s budget, each of which will have a major effect for employees and employers alike:

1. National Health Insurance

One of the big will-he-or-won’t-he questions the Finance Minister faces this year is whether to do away with the modest tax credit taxpayers receive for their medical aid payments. Government is eyeing an estimated R25 billion in funds from scrapping these tax credits, to be used to fund the incoming National Health Insurance scheme.

Many of us expected Minister Malusi Gigaba to announce this move in his Mid-Term Budget Speech in October 2017, but he held back. The move is likely to be contentious since a National Treasury analysis shows that 56% of the total credits claimed in 2014-2015 accrued to around 1.9 million taxpayers with a taxable income below R300,000.

In other words, the medical aid credit makes decent healthcare affordable to millions of people who might not otherwise be able to afford it. Taking it away could have dire consequences for the health of millions of lower income South Africans and put even more strain on an already pressurised public healthcare system.

Related: Budget Speech: The Impact on SMEs

2. Travel reimbursements and allowances

Travel reimbursements have long been a pain point for many employers and employees. Up to 28 February 2018, a portion of an employee’s travel costs was treated as remuneration when:

  • The per-kilometre rate used to calculate the travel reimbursement was greater than the SARS-prescribed rate per kilometre.
  • An employee is reimbursed for more than 12,000 business kilometres are reimbursed during the tax year.
  • The reimbursement value was greater than the prescribed maximum number of business km (12 000 km for 2018) multiplied by the prescribed rate per kilometre (R3,55 for 2018).

The result was that skills development levies and UIF contributions were added to something that should be considered as an operational cost rather than a payroll cost. This in turn increased the employer’s cost of employment. These levies and contributions were not assessed at the end of the tax year, so employers could not claim a refund.

We have long argued this regulation should be changed to be fairer to employers and employees alike. As a first step in the right direction, SARS has announced a simplification of the travel allowance and the travel reimbursement provisions, with effect from 1 March 2018.

Under this change, only the portion of the value of the travel expenses reimbursed at a rate above the ‘prescribed’ rate per kilometre will be treated as remuneration.  However, in future, we would like to see SARS handle travel reimbursements in the same way as it treats subsistence allowances for employees when they travel.

The excess portion of the subsistence allowance will be taxed on assessment, but it is not remuneration for the purposes of Pay-As-You-Earn (PAYE), skills development levies and UIF.

3. Employment Tax Incentive

I’m a fan of the Employment Tax Incentive (ETI) as an innovation geared towards addressing South Africa’s youth unemployment crisis, and the decision to extend the programme until the end of the 2019 tax year is welcome. However, administration of the scheme has always been complex for SARS and employers alike, a factor that has made some companies hesitate to take advantage of it.

Though SARS and the National Treasury have tweaked the ETI over the years, I would welcome further simplification of the definitions and calculations. That said, I don’t expect much news about the ETI this year, apart from alignment with the National Minimum Wage expected to be introduced from 1 May 2018.

Follow us on @SageGroupZA on 21 Feb for LIVE expert insights from the annual Budget Speech.

For more information about Sage’s annual tax seminars, please visit: http://go.sage.com/NPS_18Q1_C4L_ZA_EVCU_HR0310_20thAnnualPayrollTaxSeminarLP

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