South Africa 2017/18 Budget Speech

The Minister of Finance, Pravin Gordhan, has delivered the Budget Speech for the fiscal year 2017/18 on 22 February 2017.

Highlights of the Budget Speech summarised:

  • A budget deficit of 3.4% of GDP is expected for 2016/17
  • Tax revenues are estimated to grow by 7% in 2016/17, compared with 9.8% projected in the 2016 Budget
  • Government proposes to raise tax rates, primarily at the upper end of the income spectrum to maintain existing spending programs. These measures will include:
    • A new top personal income tax bracket
    • A higher dividend withholding tax rate
    • Increases in fuel taxes
    • Alcohol and tobacco excise duties

Important changes affecting Payroll:

Trusts other than Special Trusts

Rate of tax 45%

Tax Rebates and Tax Thresholds

Travel Allowance Tables

Where the distance travelled for business purposes does not exceed 12 000 kilometres per annum, no tax is payable on an allowance paid by an employer to an employee up to the rate of R3.55 per kilometre, regardless of the value of the vehicle.

This alternative is not available if other compensation in the form of an allowance or reimbursement is received from the employer in respect of the vehicle.

Medical Tax Credits

In determining tax payable, individuals can deduct medical scheme fees tax credit of:

  • R303 each for the first two dependents on the medical scheme; and
  • R204 for each additional dependent

Subsistence Allowances and Advances

Subsistence allowances have been increased for employees who is obliged to spend at least one night away from their usual place of residence on business.

  • For meals and incidental costs, R397 per day.
  • For incidental costs only, R122 per day.

Scholarships and Bursaries

Where employers grant a bursary or scholarship to employees or their dependents, and the employee has an income of less than R600 000, the value of the bursary, up to a limit, will not be taxable in the hands of the employee.

The monetary limits for bursaries will be increased from R15 000 to R20 000 for education below NQF level 7, and from R40 000 to R60 000 for qualifications at NQF level 7 and above.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

BOTSWANA BUDGET SPEECH HIGHLIGHTS

The Minister of Finance and Development Planning, Hon. Kenneth Matambo presented the 2017/18 Budget Speech to Parliament on 7 February 2017.

  • The country’s economy is expected to grow by 4.2% in 2017, in comparison to the 2.9% recorded in 2016.
  • As part of the Eleventh National Development Plan (NDP 11) which was approved in December 2016, the focus will be on the following areas:
    • Development of diversified sources of economic growth and revenue
    • Human capital development
    • Social development
    • Sustainable use of natural resources
    • Consolidation of good governance and strengthening of national security
    • Monitoring and evaluation of government programs
  • Government is in the process of developing a Tax Administration Act to simplify the Income Tax Act and Value Added Tax Act.
  • Income Tax rates will remain unchanged.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

Occupational Injuries and Diseases: Return of Earnings Form revised

A revised return of earnings form (W.As.8) for the year of assessment 01 March 2016 to 28 February 2017 in terms of the Compensation for Occupational Injuries and Diseases Act has been drawn up and published on 10 February 2017 in Government Gazette notice no. 40612.

The previous form and rules have been repealed with immediate effect.

As per the new W.As.8 form, the prescribed maximum earnings amount applicable to Provisional Earnings has been increased from R377 097 to R403 500 per annum. However, this is normally gazetted in a separate government gazette and has not yet been officially gazetted.

Another change is the minimum assessment amount which has been increased from R1000 per annum to R1080 per annum.

Employers are still encouraged to file the return online on the website of the Department of Labour.

To view the new W.As.8 form, please follow the link:

http://www.gov.za/sites/www.gov.za/files/40612_gon117.pdf

 

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

AGREEMENT ON THE INTRODUCTION OF THE NATIONAL MINIMUM WAGE

The National Minimum Wage (NMW) was agreed upon by parties to the National Economic Development and Labour Council (NEDLAC) on Wednesday, 08 February. The Congress of South African Trade Unions (COSATU) did however not sign the agreement.

It was agreed that the implementation date should be no later than 01 May 2018. The level of the national minimum wage will be R20 per hour.

This translates to about R3,500 per month for those working 40 hours per week and about R3,900 per month for those who work 45 hours per week.

Employers will not be allowed to alter conditions of employment and hours of work downwards because of the introduction of the NMW. This will be regarded as non-compliance and/or unfair labour practice.

No business will be excluded from the NMW. However, businesses which cannot afford the national minimum wage will be able to apply for exemption, lasting a year. Mitigating measures will be put in place to assist fragile businesses and sectors to avoid plant closures and massive job losses.

The national minimum wage will be adjusted annually by the NMW Commission.

Once this is signed into law, an updated news flash will be distributed.

 

Contact our legislation team at info@crs.co.za if you require any additional information.

 © 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

JORDAN

Social Security

Social Security contributions have been increased as part of the Social Security Reform which came into effect in January 2014. It was decided that the rates will be increased gradually in phases.

As of 01 January 2017, Social Security contributions in the Private Sector are as follows:

LEBANON

Tax Residency Definition

The Lebanese Parliament legislated Law no. 60 at the end of 2016, relating to the amendment of Law no. 44, Tax Residency in Lebanon.

Residency is to be understood as follows:

Any natural person is considered tax resident in Lebanon if they:

  • Have a place of business in Lebanon; or
  • Have a house in Lebanon permanently available to them or their family members (i.e. the spouse and dependent children); or
  • Is present in Lebanon for more than 183 days in any given 12 months’ period.

The 183 days will not include:

  • Days spent in transit at the International Airport Beirut; or
  • Days in Lebanon, if the stay was solely for undergoing a medical treatment.

The residency criteria for individuals refer to a place of business, and on the other hand, they also include houses in Lebanon available to the individual or his family. Lebanon has a significant number of people working outside Lebanon either permanently or temporarily. Generally, these people still own houses in Lebanon that are available to them.

Therefore, this wide definition has certainly exposed many people being resident in two countries. Where there is a Double Tax Treaty between the two concerned countries, individuals need to apply Article 4 of the specific treaty to establish their tax residency. In the absence of a treaty, these people remain a resident in two countries with the potential risk of double taxation.

QATAR

Changes to the labour Law

A work-sponsorship system, known as Kafala, currently requires all foreign workers to obtain their employer’s consent to travel abroad or switch jobs. The Qatari government confirmed new regulations to the Kafala sponsorship law, making it easier for migrant workers to change jobs and leave the country. This came into effect at the end of December 2016.

Key highlights of the changes:

  • Single exit permits have been abolished.
  • No government fees for exit permits applicable.
  • The sponsor will need to be informed that the expatriate plans to leave the country and will have an opportunity to object against this (applicants will be able to appeal against any such objections).
  • Expatriates who finish fixed contracts will need the permission of the government, rather than the consent of their sponsor, to take up another job.
  • Employers are not allowed to retain the employee’s passports.
  • All the employees must sign an employment contract.
  • Substantial fines and/or penalties will be applied to sponsors who hold the passport of their employees.

What employers need to know:

  • An employment contract needs to be in place for all the employees.
  • The terms mentioned in the employment contract need to be reviewed and should be based on the format approved by the Ministry of Labour.
  • Salaries outlined in the employment contract need to be paid in Qatari riyals into a Qatari bank account which is in line with the Wage Protection System requirements.
  • Substantial fines and/or penalties will be applied for non-compliance with above.

 

SAUDI ARABIA

Expatriate Levy

Currently, companies pay a levy of SAR 200 per month per expatriate employee (for expatriate employees that exceed the number of Saudi employees). This levy will be increased gradually every January, until 2020.

Companies that have more Saudi employees than expatriate employees will no longer be exempt, but will benefit from a discounted levy.

Furthermore, a new fee on dependents of expatriate employees will be levied as of July, 2017. The fee will be SAR 100 per dependent per month, and will increase gradually every year until 2020.

Levies per expatriate summarised below:

The fees do not apply to domestic workers such as cleaners and drivers.

Contact our legislation team at info@crs.co.za if you require any additional information.

© 2017 CRS Technologies (Pty)Ltd. All Rights Reserved.

In order to be fully compliant with HR and HCM regulations and benefit from their investment in people, companies rely on outsource service providers to help them manage the process effectively. CRS Technologies recently released their A-Z of HR services on offer to the market and this shows why the company is considered a market leader.

Ian McAlister, General Manager of CRS Technologies, explains that the HR function in business has become more complex and requires a great deal more attention than ever before.

“The legislation and need to comply with different regulation is only one facet of the broader HR and HCM function in business today. There is also the need to understand various technology systems, changes in labour law, on-site and off-site administration, as well as recruitment, which in itself has changed considerably,” says McAlister.

Obviously not all businesses possess all the skill sets necessary to address each and every HR requirement or do so at the level that is consistent – so they look to experienced service providers to safeguard their interests.

As the name suggests, CRS Technologies’ A-Z of HR services is an alphabetic listing of every service available through the company.

It begins with Audits of contracts & policies and ends with Zero tolerance policies & procedures – but also includes Employment Equity (EE) Act compliance, Industrial Relations specialisations, Labour Legislation advice, Qualification Verification and Recruitment Services; Retrenchments, among others.

“Not only is the A to Z of HR services campaign a novel way of communicating exactly what we do for the market, it is also a practical guide for anyone looking for a specific service,” McAlister adds.

CRS Technologies says tax legislation and labour regulation continues to impact on local businesses, and is a major influence across most sectors, particularly mining, retail, manufacturing and government.

The company has many years of experience and is run by seasoned HCM and HR professionals who have in-depth knowledge of South Africa’s labour market.