Women, youth and small medium and micro enterprises joined large companies and government bodies to celebrate South African innovation at its best at the prestigious State Information Technology Agency (SITA) Public Service ICT Awards ceremony on 30 October.
Based on the quality of nominations and winners announced at the awards gala dinner sponsored by Gijima, which was held at Gallagher Convention Centre, SITA acting chairperson, Z.D. Nomvete, said that he was confident that South Africa housed ample innovation to support government’s “e-strategy” for the country.
The award categories were Youth in ICT Award; Women in ICT Award; ICT Innovation and Service Transformation Award for Larger Companies; ICT Provider Innovation and Service Transformation Award for Start-ups and SMMEs; ICT Service Delivery and Transformation Award – Local Government; ICT Service Delivery and Transformation Award – Provincial Government; and ICT Service Delivery and Transformation Award – National Government. A new category was added to this year’s awards, namely the ICT Contributor of the Year Award which awards the best performer out of all of the seven category winners.
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Importantly, the Youth in ICT Award promotes the contribution made by young professionals to the local ICT industry, and to the growth and development of the sector as a whole. This year’s winner was Joel Seabi, the deputy director of ICT Security of the Co-operative Governance, Human Settlements and Traditional Affairs’ (CoGHSTA) Limpopo team. He has played an integral role in the development of ground-breaking projects undertaken by the department, to date. Qiniso Mazubane, managing director of Ndiza Information Systems and Communication Technology, was first runner up and Moabi Setshedi, a key member of Mohaba Solutions, second runner up in this category.
The Women in ICT Award, sponsored by Vodacom, aims to promote the industry to all professionals by recognising the contribution that women make to the ICT industry and to the future of the profession. The winner of this category was Mymoena Ismail. As a leader of non-profit organisation, Cape Digital Foundation, she has been responsible for creating a connected economy in the Western Cape. Ismail is also one of the architects for “e-skills” human-capacity development in South Africa and has dedicated herself to the “e-readiness” agenda in the country. Rianette Leibowitz, CEO of SaveTNet Cyber Safety NPC, was the first runner up and Zibuyile Buthelezi, chairperson of the KwaZulu-Natal Black IT Forum, the second runner up in this category.
The ICT Innovation and Service Transformation Award for Larger Companies recognises the input of companies with turnovers greater than R10-million per annum in improving service delivery to citizens. The impact their projects have had on citizens and improvement of public service delivery are a major consideration. Memeza was the winner of this category as a driver of the Public Community Policing alarms project. Since 2015, more than 1 000 community alarms have been installed into schools, homes of elderly and crime victims, drastically reducing crime in those areas. Huawei was first runner up for building a Smart City for the Ekurhuleni Metropolitan Municipality and BIGRADAP Group second runner up for the design, development and maintenance of an Integrated Multi-Sectoral System.
The ICT Provider Innovation and Service Transformation Award for Start-ups and SMMEs, sponsored by Sentech, recognises companies with turnovers of no more than R10-million per annum that have bettered service delivery to citizens. Consideration is also given to the impact the project has had on citizens and the improvement of, or the potential to improve public service delivery. The winner of this category was A2D24, which developed the RESPONSE software application. It is an innovative dispatch tool for emergency vehicles, using Uber-type technology to automatically deploy critical medical assistance timeously. Mohaba Solutions was first runner up for its Karabo Healthcare Finder Application and Kasana Computer School and Repair Centre third runner up.
The ICT Delivery and Transformation Awards reward the most outstanding service delivery, or a product or service, and/or transformation at the various levels of government.
Ekurhuleni Metro Municipality was the winner of the ICT Service Delivery and Transformation Award – Local Government category. The municipality is a driver of a number of important IT initiatives in its jurisdiction, including free Wi-Fi, roll-out of fibre optics, development of a converged infrastructure platform and provision of “eServices”. This five-year project has ensured that the municipality is a responsive, connected and collaborative city. The Department of Government Communication & Information Systems was the first runner up for GovChat and CoGHSTA Limpopo second runner up in this category for its ICT infrastructure, Systems, Governance and Security Project.
The Department of Transport and Public Works Western Cape was the winner in the ICT Service Delivery and Transformation Award – Provincial Government category for its Fleetman solution. This bespoke fleet management system based on the Oracle server platform manages the entire life-cycle of the asset. CoGHSTA Limpopo was the runner up for its Open Development Engine, or commonly referred to as “CODE”.
The Department of Home Affairs was the winner in the ICT Service Delivery and Transformation Award – National Government category as a driver of the Automated Booking System for Refugee Reception Centres. These countrywide facilities allow for seamless application, processing and issuing of permits to non-citizens who are fleeing from persecutions in their home countries. The Department of Government Communication & Information Systems was first runner up for the Development of a Google Playstore and Apple ITunes store Free Information download and Stats SA second runner up for its Go-Survey Navigation Application.
Mymoena Ismail was also the worthy winner of new category added to this year’s awards, namely the ICT Contributor of the Year Award. Ismail was considered the best performer out of all of the seven category winners, in terms of her contribution to the ICT industry in 2016, sending a very strong motivation to other women in industry at large!
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
“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.
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.
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.
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 tax should be submitted at the end of August (first provisional) and at the end of February (second provisional) – for February year-end companies.
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.”
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.
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.