With Compliments
 
     
       

We have seen how SARS’ queries and compliance has become much more onerous and focused on all taxpayers providing proof and rationale for the information submitted.

Even if your taxes are up-to-date and compliant, you can still be selected for verification by SARS as has been evidenced significantly in the last year.

Therefore, it is now even more important to have the right Tax Risk Insurance cover to protect yourself and your business, if you do not want to run the risk of having to incur costs to defend your tax position.

When you have insurance which pays the cost of your accountant and some of the best tax legal advisors during a claim, it makes perfect sense.

Contact us directly for further assistance.

 
Regards
Alexis, Dave, Associates and Team
 
     


MD House
Greenford Office Estate
Off Punters Way
KENILWORTH
7708
Tel: 021 683 4834
Fax: 086 541 2872

Email:  newsletters@mdacc.co.za
Website: www.mdacc.co.za

 





http://www.mdacc.co.za/index.php/about-us/linkedin-profiles/




 
A member of SAICA

 
Forward email

 
   

Budget 2024: How It Affects You and Your Business
 

Budget 2024: Your Tax Tables and Tax Calculator
 

Things to Look for When Buying a Small Business
 

The Five Skills Your Business Needs to Cultivate in 2024
 

Your Tax Deadlines for March 2024
 

Subscribe

 
 
March 2024


Budget 2024: How It Affects You and Your Business


ArticleImage

“Our bigger challenge… is that our pie is not growing fast enough and this limits our ability to generate sufficient revenues to distribute among our priority areas.” (Finance Minister Enoch Godongwana – Budget 2024)

Finance Minister Enoch Godongwana’s third Budget Speech in an election year contained few surprises, but also little in the form of good news, especially for South Africa’s personal income tax payers.

The Minister quoted dismal local average expected real GDP growth of 0.6% for 2023, which is projected to reach 1.6% between 2024 and 2026. This poor economic performance is ascribed to the persistent constraints in electricity supply and freight, rail and ports, as well as a high sovereign credit risk.

And the result? A sharp drop in tax revenue collection for 2023/24 which, at R1.73 trillion, is R56.1 billion lower than estimated! 

To make up the shortfall, Budget 2024 contains tax measures that will raise an additional R15 billion in 2024/2025, mainly through income tax raised by not adjusting personal tax brackets, rebates and medical tax credits for inflation, as well as above-inflation increases in alcohol and tobacco excise duties. 

Other main proposals included no increase to the general fuel levy for 2024/25, a global tax on multinational companies in South Africa with an annual revenue exceeding €750 million and the R150 billion withdrawal from SA's Gold and Foreign Exchange Contingency Reserve Account.

These announcements are briefly detailed below, along with some of the other announcements that will impact individuals and businesses.


Budget proposals that will impact you

  • Addressing the Budget shortfall, personal income tax brackets are not adjusted for inflation - so individuals who received a salary increase this year are likely to pay more tax as they could fall into a higher tax bracket.

  • No inflation adjustments to the tax rebates.

  • Medical tax credits per month are not increased by inflation.

  • A one-year extension in the R350 Social Relief of Distress (SRD) grant and increases ranging from R20 to R100 per month in other social grants.

  • Above-inflation increases in the excise duties on alcohol and increases of between 4.7 and 8.2% on tobacco products. This means that the duty on:

    • a 340ml can of beer increases by 14c,
    • a 750ml bottle of wine goes up by 28c,
    • a 750ml bottle of fortified wine goes up by 47c,
    • a 750ml bottle of spirits will increase by R5.53,
    • a 23g cigar goes up by R9.51,
    • a pack of 20 cigarettes, rises by 97c,
    • vaping products increase to R3.04 per millilitre.
  • Two-pot retirement reform to be implemented on 1 September 2024, allowing individuals access to a portion of their retirement savings before their retirement date. 


Budget proposals that will impact your business

  • A global minimum corporate tax will be implemented from 1 January 2024, with multinational corporations with an annual revenue exceeding €750 million subject to an effective tax rate of at least 15%, regardless of where their profits are located. This will broaden the corporate tax base, enabling more tax revenue collection without increasing existing corporate taxes for local businesses. This new tax is expected to increase corporate tax collection by R8 billion in the 2026 tax year.

  • An increase in the limit for renewable energy projects that can qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts.  

  • An electrical and hydrogen-powered vehicle tax incentive introduced for manufacturers in 2026, enabling them to claim 150% of qualifying investment spending. 

  • An increase in the carbon tax from R159 to R190 per tonne of CO2 equivalent from 1 January 2024.


Budget proposals that will impact all

  • The general fuel levy and the Road Accident Fund levy will not be increased this year, providing tax relief of R4 billion.

  • However, the carbon fuel levy will increase to 11c per litre for petrol and 14c per litre for diesel effective from 3 April 2024.  

  • Plastic bag levy to increase to 32c per bag from 1 April 2024.

  • The R150 billion withdrawal from SA's Gold and Foreign Exchange Contingency Reserve Account to pay down government debt.


How best to manage your taxes going forward? 


In addition to the announcements detailed above, other technical amendments proposed in the Budget 2024 may also require professional tax advice.

Furthermore, as tax collection remains government’s main source of income, you would be well-advised to rely on our expertise and advice as we determine the impact of the Budget 2024 announcements on your tax affairs. 






Budget 2024: Your Tax Tables and Tax Calculator


ArticleImage

Budget 2024 effectively brought an increase in personal income tax by not adjusting the tables for tax rates, rebates and medical tax credits, while also implementing substantial increases in ‘sin’ taxes and introducing a proposed global tax on multinational companies. 

This selection of official SARS Tax Tables and other useful resources will help clarify your tax position for the new tax year. Then follow the link to Fin 24’s Budget Calculator (just follow the four-step process) to perform your own calculation. 


Individual taxpayers – tax tables unchanged

Source: SARS

 

 

Source: SARS

 

 

Source: SARS

 

Businesses – Corporate tax rates - extended

 

Sources: SARS’ Budget Tax Guide 2024; Budget Speech 2024

 

Sin taxes increased

 


Source:
Budget 2024 People’s Guide

 

How much will you be paying in income, petrol and sin taxes?

 

Use Fin 24’s four-step Budget Calculator here to find out the monthly and annual impact on your income tax, as well as what you will pay in future in terms of fuel and sin taxes, bearing in mind that the best way to fully understand the impact of the announcements in Budget 2024 on your own and your business affairs is to reach out to us for professional advice. 






Things to Look for When Buying a Small Business


ArticleImage

“It's far better to buy a wonderful company at a fair price, than a fair company at a wonderful price.”- (Warren Buffett, investor, businessman and philanthropist)


When buying a small business there are a number of things that need to be checked before pulling the trigger and signing the contract. Doing proper due diligence will ensure you don’t invest hard earned money on a lemon. Here are the five most important things to look out for.

  • Finances

    Carefully examining the finances of the company is vital and bringing an expert on board to do it for you will ensure you don’t miss those hidden details that could be signs of a faltering company. Let us examine your past financial statements and tax returns for you to discover trends and establish whether sales are on the way up or down. 

    We will also look closely at the assets and liabilities of your company, review the status of any inventory, equipment, and physical assets and analyse your likely costing for maintenance, necessary upgrades and stock issues. This is all essential as buying a company and then finding yourself in an immediate cash flow crisis is the worst possible start to your hopeful new venture. 

  • Intellectual Property

    Does the company you are buying depend on one invention or many? If so, have those inventions been patented, copyrighted or trademarked? And just who owns those things? It’s no good buying a business only to find you now owe the former owners for the rights to using their creations.

  • Customer opinions

    The first step is to examine the internet for reviews. Perhaps the previous owners have been rude and undermined any goodwill that should have arisen from an otherwise excellent concept? Maybe the much-vaunted invention isn’t quite as good as expected? 

    Speak to key customers and ask them their opinion on a takeover. Does it bother them or will they stay on with the company when it has been sold? Does the goodwill of the business rest with the product and the business itself or is it personal to the current owners?

  • Employees

    Where possible conduct employee interviews to fully understand what they think of the company, how they believe it can be improved and whether they are planning on staying on if there is a new owner. The employees may be able to spot gaps or weaknesses you may not easily see, but more importantly may also reveal undiscovered areas for expansion. 

    A full employee analysis will, with the help of your accountant, also help you determine just where there are gaps that need to be filled, what training still needs to be done, and most importantly, what all of that will cost.

  • Existing contracts

    Take a look at any long-term existing contracts. Anything from a rental agreement to a customer service contract could reveal problems. Are there any burdensome terms and conditions that you will be locked into? Is there a customer who has to be serviced at an impossible rate, or a landlord who is expecting ten years of rent before you can move your headquarters? What are the costs of exiting these contracts, and can you afford them if necessary?





The Five Skills Your Business Needs to Cultivate in 2024


ArticleImage

“The only thing worse than training your employees and having them leave is not training them and having them stay.” – (Henry Ford, Founder, Ford Motor Company) 

In a world where everything seems more expensive today than it was yesterday training and advancement of staff can seem of lesser importance. As an increasing number of studies show, however, this could not be further from the truth. A lack of training at businesses can lead to decreasing quality of service, high employee churn rates, and more recently, an inability to match more technologically savvy competitors in the market.

In 2024, speak to your accountant to budget for the advancement of your employees and the development of skills within your organisation. Businesses who fail to bring these skills on board, whether through training or additional hires, are guaranteeing tough times ahead.

  1. AI Prompting

    Like Excel in the 2000s this is the one skill every office employee will need to have over the coming years. At the moment, prompt engineers are commanding enormous salaries for their understanding of just which commands are genuinely helpful when dealing with AI. It’s all very well having the latest technology, but if you are unable to unlock its potential then you are wasting the investment and falling behind every day.

  2. Creative Communication

    Ironically, in an era where AI is capable of producing a facsimile of good writing in a matter of minutes, genuine heartfelt, creative and original communication is going to become even more critical. Ensuring you have employees who are capable of identifying communication opportunities, and actively translating the insights of AI into easily understood, actionable and motivational text will be the difference in a world littered with paint-by-numbers ChatGPT blog posts and internal emails.

  3. Cybersecurity

    As the world moves increasingly digital and automated it also becomes more vulnerable to cyber-attacks. Online threats can cripple companies and put them out of commission for weeks if not months, and lost information can be very hard to retrieve. While it is imperative that your company has experts employed who understand the threats, each and every employee should also be trained in the basics and potential loopholes that criminals will exploit. Failing to train in this area will no doubt lead to far greater costs down the line.

  4. People Management

    Managing a team requires a completely different set of skills to just ten years ago. With most jobs incorporating at least a percentage of remote work, and freelancers becoming an integral part of projects, managers need to be up to date on a number of new communication and management apps and solutions. Additionally, they need to know how to motivate and communicate effectively online and develop teams from people located around the world.

  5. Customer Service

    In the modern era of online reviews and social media, customer service has never been more important. Now, one bad experience doesn’t disappear, but instead lives with a company online forever. As a result, it’s critical that staff be trained in how to keep customers happy, how to handle a disgruntled customer and, when the odd bad reviews inevitably come in, how to turn them around to the company’s advantage. 





Your Tax Deadlines for March 2024


ArticleImage
  • 07 March - Monthly Pay-As-You-Earn (PAYE) submissions and payments

  • 25 March – VAT manual submissions and payments

  • 27 March – Excise duty payments

  • 28 March – End of the 2023/24 Financial year, Value-Added Tax (VAT) electronic submissions and payments, & CIT Provisional payments where applicable.




Note: Copyright in this publication and its contents vests in DotNews - see copyright notice below.

 
 
 
  Disclaimer

The information provided herein should not be used or relied on as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your professional adviser for specific and detailed advice.