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The Tsogo Sun Entrepreneur Of The Year Winner Announced

The 2016 winner of the Tsogo Sun Entrepreneur of the Year Award is Nqobile Nkosi, owner of NQ Jewellery Design Services, based in Soweto, which was announced on 20 October at a gala banquet at the group’s Riverside Sun Resort on the banks of the Vaal River in Vanderbijlpark.

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The 2016 winner of the Tsogo Sun Entrepreneur of the Year Award is Nqobile Nkosi, owner of NQ Jewellery Design Services, based in Soweto, which was announced on 20 October at a gala banquet at the group’s Riverside Sun Resort on the banks of the Vaal River in Vanderbijlpark.

The event was attended by Minister of Tourism, Derek Hanekom, who gave the keynote address and attended the Tsogo Sun Entrepreneurs National Supplier Showcase Exhibition on Friday 21 October.

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Rebone Sesoko, Candy Tothill, NQ and Marcel von Aulock

Says Candy Tothill, Tsogo Sun’s GM of Corporate Affairs, “Our wholehearted congratulations go to Nqobile on his worthy win. In his role as the Tsogo Sun Entrepreneur of the Year, Nqobile will serve as an inspiring role model to other entrepreneurs, and set an example of what can be achieved when one perseveres to overcome obstacles and challenges. Our Entrepreneur of the Year winners become ambassadors for the programme for the following year; they talk about their experiences, their secrets to success, as well as the programme, and they promote their own businesses. We welcome Nqobile as our seventh ambassador and we have no doubt he will be an inspiration and contribute to the development of other SMMEs in South Africa.”

Among the prizes that Nqobile won were R30 000 from Tsogo Sun, a business bursary from Tsheto Leadership Academy valued at R20 000, and a professional business image experience from tweak&STYLE valued at R15 000.

Related: Become A Master Of Entrepreneurship Through Wits Business School

A turn of events saw Nqobile launching into jewellery design and manufacturing. He originally had plans to become an electrical engineer, but when funds ran out, he started a two-year course in jewellery design and manufacturing at the Soweto Jewellery School – and so started on the path to establishing his own jewellery design company. He registered his company in 2013 and subsequently attorney Jerry Nkeli invested in it and became chairman of Nqobile’s company, and his mentor. NQ Jewellery Design Services is Soweto’s first jewellery manufacturing and retail business. It employs six people, all from Soweto, including two disabled interns who are being financially supported by HopeFund in France.

Nqobile joined Tsogo Sun Entrepreneurs last year. Tsogo Sun is working with him to establish a more sustainable and consistent income stream, determining the feasibility of opening a jewellery outlet for his company at Gold Reef City Theme Park, and assisting with other potential plans to grow market access.

The awards dinner is part of the Tsogo Sun Entrepreneurs conference that includes an intensive business workshop as well as a National Supplier Showcase where the entrepreneurs exhibited their products and services to potential customers, giving them access to new markets.

The four-day conference represents the successful completion of a year-long programme that started in November last year when the new intake of businesses was inducted into the full year development programme. They were each allocated a business coach and a personal life coach to help them close the gaps in their businesses and to develop themselves as the people running them. This one-on-one coaching is customised according to each entrepreneur’s needs. In addition, business foundation skills training was given to the entrepreneurs in their provinces.

Tsogo Sun delivers the Entrepreneurs programme with the support of several strategic partners. These include Carlson Wagonlit Travel, which has been a long time contributor to the beneficiaries of the programme for the past seven years and funds some of the bursaries for the University of Cape Town Guesthouse Management and Small Business Management courses; and Queen Ramotsehoa, whose company, Tsheto Leadership Academy, provides a repertoire of coaching and business mastery services for personal and enterprise development to the entrepreneurs. Adds Tothill, “Coaches from Tsheto Leadership Academy work with our entrepreneurs throughout the year. We’ve been impressed with the powerful impact that this coaching has had on the entrepreneurs’ confidence and thinking, leading to exciting development within many of their businesses.” Colour Accounting gives financial management training to the entrepreneurs.

To enter the Entrepreneur of the Year competition, the eligible entrepreneurs, which included a total of 152 Tsogo Sun Entrepreneurs and Alumni who are benefitting from the development programme, were required to complete a comprehensive entry form.

Related: Is Entrepreneurship Dying In SA

These were shortlisted and five finalists were selected, using a stringent evaluation method that included assessing performance in the programme, financial performance, customer knowledge, marketing, innovation efforts, job creation, contributions to the greater community, potential for growth, and overall sustainability.

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Tsogo Sun 5 finalists waiting for the announcement

The finalists were then interviewed by a panel of nine judges: Marcel von Aulock, CEO of Tsogo Sun; Vusi Dlamini, Group HR Director of Tsogo Sun; Laurelle McDonald, Corporate Finance Manager of Tsogo Sun; Ravi Nadasen, Tsogo Sun Operations Director; Ella Bella Leite, Founder of Generation Earth; Adriaan Groenewald, CEO and Co-founder of Leadership Platform; Carol Sanderson, 2014 winner and owner of Casambo Exclusive Guest Lodge; Emmah Makatu, 2013 winner and owner of Zwinoni Lodge; and Salome Tshungu, 2012 winner and owner of The Orchards.

Tothill says participation in the programme is open to all South African businesses with an annual turnover of less than R50 million. There are three channels through which businesses can join the programme: the HCI Supplier Club (Hosken Consolidated Investments Limited is the key shareholder of Tsogo Sun); Tsogo Sun’s Supplier Showcases, where entrepreneurs with potential for growth are identified by Tsogo Sun and invited to join the programme; and the Department of Tourism and tourism agencies that nominate businesses for evaluation for inclusion by Tsogo Sun.

“It’s essential for big business to get involved in small business development in order to boost job creation and the economy,” Tothill notes.

“We’re proud of what our Tsogo Sun Entrepreneurs are accomplishing, often against the odds, and of what we can do to help them grow. The Entrepreneur of the Year Award is our way of acknowledging their hard work and significant achievements.”

Tsogo Sun Entrepreneurs by numbers

  • 180 beneficiaries are supported nationally by the programme
  • 152 are enrolled in development
  • 82% are black South African women
  • 74% have graduated to the Alumni phase and have trained to become mentors to new entrepreneurs
  • 47 businesses in the Alumni phase have expanded their operations as a result of the programme
  • 126 have successfully completed the UCT Business Management Course funded by the programme
  • R84 million was the group’s combined spend on enterprise and supplier development for the past year, of which R14million was spent on enterprise development beneficiaries and R70million on supplier development beneficiaries

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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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Entrepreneur Today

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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