COID Return of Earnings (ROE) Form revised

A revised return of earnings form (W.As.8) for the year of assessment 01 March 2017 to 28 February 2018 in terms of the Compensation for Occupational Injuries and Diseases Act has been drawn up and published on 27 March 2018 in Government Gazette notice no. 41529.

The previous form and rules have been repealed with immediate effect.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 R403 500 per annum to R430 944.

Because of continuously rising costs, the minimum assessment amount has been increased from R1 080 per annum to R1 153 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:
https://www.gov.za/sites/default/files/41529_gon379.pdf  

 

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

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

Exemption from the new National Minimum Wage

Under the recently-approved National Minimum Wage (NMW) Bill, which is set for implementation on the 1st of May 2018, employers will have to pay their staff a minimum wage of R20 an hour except for sectors such as the farm/forestry, domestic and expanded public works programme workers, that have been given a longer transition period to pay R18, R15 and R11 per hour respectively.

Section 15 of the NMW Bill makes provision for an employer or an employers’ organisation registered in terms of section 96 of the Labour Relations Act, acting on behalf of its members to apply for an exemption in the prescribed form and manner from paying the national minimum wage.

Companies and businesses that cannot afford the prescribed minimum wage are urged to apply for exemption with the Department of Labour.

The Department of Labour is currently finalising an online system for employers or employers’ organisations. Application for exemptions does not make provision for manual submissions and the process can only be accessed via the NMW website www.nmw.dol.gov.za which will be running in due course.

Exemptions can only be granted if every representative trade union/workers have been meaningfully consulted and all the required information by the system has been provided.

The system will require the employers’ particulars such as:

  • Unemployment Insurance Fund (UIF) reference
  • Compensation for Injuries and Diseases Act (COIDA) number
  • South Africa Revenue Services (SARS) number
  • Company Registration number
  • Nature of business conducted
  • Bargaining council
  • Address and contact person names and contact details.

Employers should take note that exemptions may be withdrawn if false or incorrect information has been provided, if the employer’s financial position has improved to the extent that the employer is able to pay NMW, or if the employer is not complying with the notice.

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

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

South African employers will by now be cognisant of the fact that the Compensation for Occupational Injuries and Diseases (COID) Act replaces the Workmen’s Compensation Act, and they have to register with the Compensation Commissioner.

The legislation covers compensation for disablement caused by occupational injuries, diseases sustained or contracted by employees in the course of their employment, and for death resulting from injuries and diseases.

The benefits are paid from the Compensation Fund, which gets its money from compulsory contributions.

As part of registering for COID an employer is required to submit the annual Return of Earnings (ROE) form whereupon the employer will pay and annual assessment fee.

The annual assessment fee of an employer is based on their employee’s earnings and the risks associated with the type of work or profession.

The RMA (Rand Mutual Assurance) COID ROE filing season deadline is 31 March 2018.

The COIDA ROE filing season deadline has been extended to 31 May 2018. The online Compensation Fund (CF) filing system will be open for submission from 1 April 2018 to 31 May 2018.

These are important dates to remember and like all HR and payroll related legislation, processes, checks and balances can be tricky to manage. We can assist you with the successful assessment and submission of your ROE.

We have the expertise to assist you to better understand the legislation and the impact on your business, to advise you on the best practice process to comply, to submit your ROE to the Department of Labour or the RMA, as well as increase compliance with legislation and reduce the risk of non-compliance.

Severe penalties can be imposed for non-compliance and criminal proceedings will be instituted for misrepresentation of facts.

Email us today at info@crs.co.za to schedule a conversation and let us guide you through the process!

NAMIBIA BUDGET SPEECH HIGHLIGHTS

The Minister of Finance, Hon. Calle Schlettwein, presented the 2018/19 Budget Speech to Parliament on 7 March 2018.

  • The budget deficit is estimated at 4.5% of GDP in 2018/19, compared to 5.4% in 2017/18 and an average of about 3.6% over the Medium Term Expenditure Framework (MTEF).
  • Inflation has been on a downward trend, slowing from 6.7% in 2016 to 6.2% in 2017 and now to 3.6% in January 2018 – in part due to weak domestic demand and a stronger currency.
  • Total revenue for 2018/19 is estimated at N$56.70 billion.
  • A total of N$ 972.02 million was collected from the recovery of outstanding tax arrears through the Tax Arrear Recovery Incentive Program (tax amnesty) that was announced in January 2017 and continued until 31 July 2017.
  • Old age pensions are increased by N$50 to a monthly grant of N$1250.
  • The main Tax proposals include:
    • To reduce the lower individual tax bracket from 18% to 17% and introduce new tax rates of 39% and 40% for individuals earning over N$1.5 million and N$2.5 million respectively.
    • To introduce a 10% dividend tax for dividends paid to residents.
    • To subject income derived from commercial activities by charitable, religious, educational and other types of institutions under Section 16 of the Income Tax Act to normal corporate tax.
    • To repeal of the Export Processing Zone Act and introduction of the Special Economic Zones, with a sunset clause for current operators with the EPZ status.
    • Namibian residents will now have to declare all income earned from foreign sources in their annual tax returns.
    • To introduce VAT on proceeds on the sale of shares or membership in a company owning commercial immovable property.

 

  • Proposed new Tax Tables

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

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

TAX RATES (TAX YEAR ENDING 28 FEBRUARY 2019)

Individuals and special trusts

Rebates

Tax Threshold

Retirement fund lump sum withdrawal benefits

Retirement fund lump sum benefits or severance benefits

Companies Tax

 

Retirement fund contributions

  • Amounts contributed to pension, provident and retirement annuity funds during a tax year are deductible by members of those funds
  • The deduction is limited to 27.5% of the greater of remuneration for PAYE purposes or taxable income (both excluding retirement fund lump sums and severance benefits)
  • The deduction is further limited to the lower of R350 000 or 27.5% of taxable income
  • Amounts contributed by employers are taxed as fringe benefits
  • Amounts contributed by employers and taxed as a fringe benefit are deemed to be contributions by the individual employee;
  • Any contributions exceeding the limitations are carried forward to the next tax year and are deemed to be contributed in that following year. The amounts carried forward are reduced by contributions set off when determining taxable retirement fund lump sums or retirement annuities.

Medical  tax credit

In determining tax payable, individuals are allowed to deduct medical scheme fees tax credit of:

  • R310 each for the individual who paid the contributions and the first dependent on the medical scheme; and
  • R209 for each additional dependent.

Disability expenses

In determining tax payable, individuals are allowed to deduct:

  • in the case of an individual who is 65 and older, or if an individual, his or her spouse, or his or her child is a person with a disability, 33.3% of the sum of qualifying medical expenses paid and borne by the individual; and an amount by which medical scheme contributions paid by the individual exceed three times the medical scheme fees tax credits for the tax year; or
  • any other individual, 25% of an amount equal to the sum of qualifying medical expenses paid and borne by the individual, and an amount by which medical scheme contributions paid by the individual exceed four times the medical scheme fees tax credits for the tax year, limited to the amount which exceeds 7.5% of taxable income (excluding retirement fund lump sums and severance benefits).

Donations

Deductions in respect of donations to certain public benefit organisations are limited to

  • 10% of taxable income on assessment (excluding retirement fund lump sums and severance benefits). The amount of donations exceeding 10% of the taxable income is treated as a donation to qualifying public benefit organisations in the following tax year.
  • 5% is allowed in the payroll – the benefit calculated by applying a prescribed formula.

Subsistence Allowances and Advances

Where the recipient is obliged to spend at least one night away from his or her usual place of residence on business and the accommodation to which that allowance or advance relates is in the Republic of South Africa and the allowance or advance is granted to pay for—

  • Meals and incidental costs, an amount of R416 per day is deemed to have been expended
  • Incidental costs only, an amount of R128 for each day which falls within the period is deemed to have been expended.

Where the accommodation to which that allowance or advance relates is outside the Republic of South Africa, a specific amount per country is deemed to have been expended.

Details of these amounts are published on the SARS website under Legal & Policy / Secondary Legislation / Income Tax Notices / 2018.

Travelling allowance

Rates per kilometre, which may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed, are determined by using the following table:

Note:

  • 80% of the travelling allowance must be included in the employee’s remuneration for the purposes of calculating PAYE.
  • The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.
  • No fuel cost may be claimed if the employee has not borne the full cost of fuel used in the vehicle and no maintenance cost may be claimed if the employee has not borne the full cost of maintaining the vehicle (e.g. if the vehicle is covered by a maintenance plan).
  • The fixed cost must be reduced on a pro-rata basis if the vehicle is used for business purposes for less than a full year.

The actual distance travelled during a tax year and the distance travelled for business purposes substantiated by a log book are used to determine the costs which may be claimed against a travelling allowance.

AA Rate per kilometer

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 R3.61 cents per kilometre, regardless of the value of the vehicle.

However, this alternative is not available if other compensation in the form of an allowance or reimbursement (other than for parking or toll fees) is received from the employer in respect of the vehicle.

 Employer-owned vehicles

The taxable value is 3.5% of the determined value (the cash cost including VAT) per month of each vehicle.

Where the vehicle is–

  • The subject of a maintenance plan when the employer acquired the vehicle the taxable value is 25% of the determined value; or
  • Acquired by the employer under an operating lease the taxable value is the cost incurred by the employer under the operating lease plus the cost of fuel

80% of the fringe benefit must be included in the employee’s remuneration for the purposes of calculating PAYE. The percentage is reduced to 20% if the employer is satisfied that at least 80% of the use of the motor vehicle for the tax year will be for business purposes.

On assessment the fringe benefit for the tax year is reduced by the ratio of the distance travelled for business purposes substantiated by a log book divided by the actual distance travelled during the tax year.

A further relief is available on assessment for the cost of license, insurance, maintenance and fuel for private travel if the full cost thereof has been borne by the employee and if the distance travelled for private purposes is substantiated by a log book.

Interest-free or low-interest loans

The difference between interest charged at the official rate (currently 6.75% as at July 2017) and the actual amount of interest charged is to be included in gross income.

Residential accommodation

The value of the fringe benefit to be included in gross income is the lower of the benefit calculated by applying a prescribed formula or the cost to the employer if the employer does not have full ownership of the accommodation. The formula will apply if the accommodation is owned by the employee, but it does not apply to holiday accommodation hired by the employer from non-associated Institutions.

 Dividends

Dividends received by individuals from South African companies are generally exempt from income tax, but dividends tax at a rate of 20% is withheld by the entities paying the dividends to the individuals.

Foreign Dividends

Most foreign dividends received by individuals from foreign companies (shareholding of less than 10% in the foreign company) are taxable at a maximum effective rate of 20%. No deductions are allowed for expenditure to produce foreign dividends.

Interest exemptions

  • Interest from a South African source earned by any natural person under 65 years of age, up to R23 800 per annum, and persons 65 and older, up to R34 500 per annum, is exempt from taxation
  • Interest is exempt where earned by non-residents who are physically absent from South Africa for at least 182 days (or 183 days in a leap year) during the 12 month period before the interest accrues and the debt from which the interest arises is not effectively connected to a fixed place of business in South Africa of that non-resident.

Other deductions

Other than the deductions set out above an individual may only claim deductions against employment income or allowances in limited specified situations, e.g. bad debt in respect of salary.

SARS Interest Rates

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

 © 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

BOTSWANA BUDGET SPEECH HIGHLIGHTS

The Minister of Finance and Economic Development, Hon. Kenneth Matambo, presented the 2017/18 Budget Speech to Parliament in February 2018.

  • The country’s economy is expected to grow by 4.7% and 5.3% respectively
  • The budget deficit for 2018/2019 is projected at an estimated of P3.59 billion representing 1.8% of GDP
  • The 2017/18 revised budget estimate is a deficit of P2.42 billion compared to the initial estimated deficit of P2.35billion
  • Inflation declined from 3.1% in January 2017 to 2.9% in November 2017 before increasing to 3.2% in December 2017
  • The tax Administration Act is expected to be finalized in the next financial year
  • Botswana Government is undertaking a review of the Botswana International Financial Services Centre tax regime to remove any perception that Botswana is a tax haven. The review will be undertaken as part of the Income Tax (Amendment) Bill scheduled for presentation to Parliament during 2018

Income Tax rates will remain unchanged.

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

© 2018 CRS Technologies (Pty)Ltd. All Rights Reserved.

The Labour Laws Amendment Bill, first introduced to South Africa’s parliament in November 2015, and has been passed by the National Assembly. If it passes the review process by the National Council of Provinces and authorised by the President, it will ensure that fathers have the right to ten consecutive days leave when a child is born or adopted.

Nicol Myburgh, Head – HR Business Unit at CRS Technologies, a leader in HR and HCM solutions market, says that currently paternity leave falls under the scope of family responsibility leave.

Currently, as prescribed by the Basic Conditions of Employment Act, male employees are entitled to three days paid family responsibility leave following the birth of their child.

“But there is no separate statutory leave type to provide for paternity leave until now. This has been in the works for some time now, on 25 November 2015 a draft bill was published in the government gazette which proposes to amend BCEA and the Unemployment Insurance Act. The draft amendment bill aims to give employees who are parents (regardless of gender), parental, adoption and surrogacy leave as well as UIF benefits,” says Myburgh.

The Bill, if passed, will entrench the right to claim payment of parental benefits, ten consecutive weeks adoption leave if the child adopted is below the age of two, the right to claim payment of adoption benefits and ten weeks ‘commissioning parental leave’ for employees in a surrogate motherhood agreement.

Additionally, as CRS Technologies points out, if there are two adoptive parents, one of the parents may apply for parental leave and the other adoption leave. If there are two commissioning parents, one of the parents may apply for parental leave and the other parent may apply for commissioning parental leave.

Local media reports have noted the Bill was proposed by the ACDP and in a statement the political party said, “The bill seeks to provide for parental leave, adoption leave and commissioning parental leave. It also provides for the payment of parental benefits as well as commissioning parental benefits from the Unemployment Insurance Fund.”