OFFICIAL INTEREST RATE REDUCED

The South African Reserve Bank reduced the repo rate by 25 basis points to 6.75% per annum with effect 20 July 2017. This means that the rate at which the SARB lends to your bank has decreased from 7.00% to 6.75% per annum.

Employers must take note that it affects their official interest rates on payrolls and this decreased to 7.75 %. Please adjust it effective 1 August 2017.

The definition of “official interest rate” in the Seventh schedule of the ITA means:

  • In the case of a loan which is denominated in the currency of the Republic, the South African repurchase (repo) rate + 100 basis points; or
  • In the case of a loan which is denominated in any other currency, the South African repurchase rate applicable in that currency +100 basis points.

Where a new repurchase rate or equivalent rate is determined, the new interest rate applies for the purposes of this definition from the first day of the month following the date on which that new repurchase rate or equivalent rate comes into operation.

 

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

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

Draft Taxation Laws Amendment Bill 2017 and Draft Tax Administration Laws Amendment Bill 2017 published

The amendments proposed by the Taxation Laws Amendment Bill (TLAB) 2017 and the Tax Administration Laws Amendment Bill (TALAB) 2017 were published on SARS’s and National Treasury’s websites for public comment.

These draft Bills give effect to the tax proposals announced on Budget Day, 22 February 2017.

The main tax proposals in the TLAB 2017 that can have an impact on employers and payroll are:

  • Tax relief for bargaining councils regarding tax noncompliance.
  • Changes to the anti-avoidance rules for certain share schemes, mainly trusts.
  • A higher fringe benefit exemption for bursaries to learners with disabilities.
  • Removing the foreign employment income tax exemption in respect of South African residents.
  • Addressing the circumvention of anti-avoidance rules dealing with share buy backs, dividend stripping and contributed tax capital.
  • Postponement of annuitization requirement for provident funds to 1 March 2019.
  • Clarifying the rules relating to the taxation of employee-based share schemes.
  • Clarifying the hours used for the ‘160-hour’ determination for section 4(1)(b)(ii) of the Employment Tax Incentive Act, are the hours defined as “ordinary hours” by the Basic Conditions of Employment Act.

The main tax proposals in the TALAB 2017 that can have an impact on employers and payroll are:

  • To include only the portion of the travel reimbursement that is calculated at a rate per kilometer that exceeds the prescribed rate per kilometer in remuneration.
  • To spread the R350 000 pa monetary cap that limits the deduction allowed in respect of contributions to retirement funds over 12 months.

A more detailed discussion of the proposed changes will be provided once the legislation has been formally introduced to the National Assembly.

 

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

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

MALAWI 2017/18 BUDGET SPEECH

The Minister of Finance, Economic Planning and Development, Goodall Gondwe, presented the Budget for 2017/18 to the parliament on 19 May 2017.

Highlights of the budget speech summarized:

  • The projected deficit is 3.9 % of GDP.
  • The implementation of fiscal and monetary policies has led to reduction of budgetary deficit (including grants) from 6.1 percent of GDP in 2013/14 to a projected 3.9 percent of GDP.
  • Government is imposing a single formula for interest on overdue tax for all tax types to reduce tax administration costs.
  • A single formula for penalties on late submission of returns for all tax types was also imposed.
  • Personal Income Tax measures, effective 01 July 2017:
    • The tax-free income bracket has been increased from K20,000 per month to K30,000 per month;
    • An Additional PAYE Bracket of 35 percent for Salaried Income of above MK3,000,000.00 per month is introduced.
  • The minimum wage has been increased from K19,000 to K25,000 per month. This means that all those who earn a minimum wage will be below the threshold.

 

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

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

EGYPT RESIDENT INDIVIDUAL INCOME TAX RATES

Egypt’s parliament has voted to raise the minimum income tax threshold and gave tax breaks to the first three brackets, effective 01 July 2017.

The updated annual tax brackets will be as follows:

In addition, the following measures will apply:

  • Those in the income tax bracket making between 7,200 – 30,000 pounds a year and who would normally pay a 10 percent income tax will get an 80 percent tax break, meaning they pay 20 percent of taxes they would normally pay.
  • The 30,000 – 45,000 pound bracket, which is taxed at 15 percent, will get a 40 percent tax break, meaning they pay 60 percent of the taxes they would normally pay.
  • The 45,000 – 200,000 pound a year bracket, taxed at 20 percent, will get a 5 percent tax break, meaning they pay 95 percent of the taxes they would normally pay.
  • Egyptians making more than 200,000 pounds a year who get taxed at 22.5 percent will pay their full income tax.

Note:

It is important to note that the new tax update would be considered starting July 2017 until December 2017, accordingly tax year end, and should be divided to cover the first half (January to June) using old tax brackets and the second half (July to December) using the updated tax brackets and the related discounts.

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

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

ANGOLA INCREASE OF THE MINIMUM WAGES

On 7 June 2017, Presidential Decree No. 91/17 was published, approving the review of the national minimum wage, setting the national minimum wage and the minimum wage to be paid in each of the main economic sectors, as follows:

  • Trade and extractive economic sectors: Kz 24 754.95;
  • Transport, services and manufacturing sectors: Kz 20 629.13;
  • Agriculture sector: Kz 16 503.30.

The national minimum wage was set at Kz 16 503.30

The above-mentioned decree is effective 07 June 2017.

 

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

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