INCREASE OF THE OFFICIAL INTEREST RATE ANNOUNCED

The monetary policy committee (MPC) of the South African Reserve Bank has decided to increase the repo rate for the first time in two years. The announcement was made on Thursday, 22 November 2018.

The repo rate is increased by 25 basis points to 6,75% per year, effective from 23 November 2018. This means that the rate at which the SARB lends to your bank has risen from 6,5% to 6,75%.

For employers, the official interest rate applicable to payrolls will be 7,75%.

The definition of “official interest rate” in the Seventh Schedule of the Income Tax Act 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.

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2019 Budget Speech Highlights

In her inaugural national budget presentation, Zambian Finance Minister, Honourable Margaret Mwanakatwe, informed the nation that the 2019 budget was framed on building on the firm foundation of the past seven years and tackling the challenges ahead.

The theme of the 2019 National Budget is “Delivering Fiscal Consolidation for Sustainable and Inclusive Growth”.

The budget objectives are as follows:

  • GDP growth of 4%
  • Inflation of between 6% and 8%
  • Reduce the fiscal deficit to 6.5% of GDP from 7.4% in 2018
  • Increase domestic revenue to not less than 18.4% of GDP from 17.7% in 2018
  • Reduce domestic borrowing from 4% to 1.4% of GDP
  • Digitalise the entire revenue collection process in an effort to broaden the tax base and enhance compliance levels
  • Raise international reserves to at least 3 months of import cover
  • The Minister proposed to roll out an increased K86.8 billion budget next year, or 28.9% of GDP, up from K71.6 billion in the 2018 national budget.
  • It is proposed that Value Added Tax (VAT) be abolished and replaced with Sales Tax. Guidance on how the Sales Tax will be administered is yet to be provided. The Sales Tax will be non-refundable, and Government expects the process to be simpler
  • Amendment of the VAT Act to provide for the prosecution of the directors or managers of a company, where the company commits an offence under the VAT Act
  • In 2019, Government will commence with the implementation of the National Health Insurance Act No 2 of 2018 in a phased manner and will ensure universal access to quality healthcare services
  • No changes have been proposed to the existing personal income tax regime, therefore the PAYE bands and rates remain as follows:

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

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There is a fresh development regarding the Compensation for Occupational Injuries and Diseases Act (COIDA) that South African employers must be aware of.

On 9 November 2018, the Compensation Commissioner, Vuyo Mafata, published the COID Act Regulation with regard to Injury on Duty (IOD) and Occupational Disease (OD) documents to be provided by employers to the Compensation Fund.

The regulation as published in Government Gazette No. 42021, informs all Employers and Employees of the primary documents needed for the registration, adjudication and processing of IOD/OD claims which will improve the turn-around time and finalisation of the claims.

It is extensive and detailed and covers several aspects including the registration of a claim process; the documents required for the reporting of the IOD/OD; the process of determining whether the IOD/OD is in fact work-related; the documentation needed to determine the liability of the claim; the management of benefits payable, such as banking details; the treatment of a patient by a medical service provider for up to 24 months; documentation required for the processing of Temporary Total Disablement (TTD) and Temporary Partial Disablement (TPD) benefits; and with regard to fatal claims, the document  required to consider payment of compensation to the dependants of the deceased.

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

COIDA Regulation on Injury on Duty (IOD) and Occupational Disease (OD) documentation to be provided by Employers

On 9 November 2018, the Compensation Commissioner, Vuyo Mafata, published the COID Act Regulation with regard to Injury on Duty (IOD) and Occupational Disease (OD) documents to be provided by employers to the Compensation Fund.

The regulation as published in Government Gazette No. 42021, serve to inform all Employers and Employees of the primary documents needed for the registration, adjudication and processing of IOD/OD claims which will improve the turn-around time and finalization of the claims.

The regulation is a detailed explanation of the following:

  • The registration of a claim process
  • The documents required for the reporting of the IOD/OD
  • The process of determining whether the IOD/OD is in fact work-related
  • The documentation needed to determine the liability of the claim
  • The management of benefits payable, such as banking details
  • The treatment of a patient by a medical service provider for up to 24 months
  • Documentation required for the processing of Temporary Total Disablement (TTD) and Temporary Partial Disablement (TPD) benefits
  • Documentation required for the processing of Permanent Disability (PD) benefits
  • In respect of fatal claims, the documentation required to consider payment of compensation to the dependants of the deceased

To view the Government Notice, please follow the link:

https://www.gov.za/sites/default/files/42021_gon1217.pdf

 

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

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PRELIMINARY DRAFT REVISION OF THE LABOUR LAW SUBMITTED BY GOVERNMENT

Mozambican Government has submitted the preliminary draft revision of the Mozambican Labour Law on Wednesday 24 October for discussion. The proposal was presented to employers and trade unions in Maputo by the Ministry of Labour, Employment and Social Security.

The draft labour law aims to replace the current Labour Law which has been in force since 2007. The Minister of Labour, Employment and Social Security Victoria Diogo said that the revision of the Labour Law aims to respond to the current challenges of the market while guaranteeing fundamental labour rights.

The most significant proposals are as follows:

  • To extend the level of relationship for the allocation of five days of compassionate leave. Parents-in-law and sons and daughters-in-law have been added to the list of relatives which already includes spouses, parents, children, stepchildren, siblings, grandparents and step-parents.
  • New rules on the limits of hiring foreign labour. The current limitations do not match market dynamics and will deter those who want to invest in Mozambique.
  • The prohibition of HIV/Aids testing for job seekers. Currently, several Mozambican entities request HIV/Aids testing for job seekers, but the Health Ministry argues that this is a private matter.
  • To add Transport, Hospitality and Catering, General and Food Retailing to the sectors whose services are considered essential, meaning that in the case of a strike, workers in those sectors would be required to ensure the provision of minimum services, as already applies to medical services, water supply, energy and fuels and telecommunications.
  • Labour disputes would be subject to labour mediation, before being submitted to arbitration or labour courts, except in cases of precautionary measures.

The preliminary draft revision will be considered by the Labour Advisory Committee before being submitted to the Council of Ministers and later to the Assembly of the Republic for approval.

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

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