NOVEMBER 2019 – SOUTH AFRICA
EXPLANATORY SUMMARY OF THE TAX ADMINISTRATION LAWS AMENDMENT BILL, 2019

It is important that employers note the following:

Publication of the Explanatory Summary of the Tax Administration Laws Amendment Bill, 2019

Government gave notice that the Minister of Finance intends to introduce the Tax Administration Laws Amendment Bill, 2019 to the National Assembly soon. An explanatory summary of the Bill was published in accordance with the Rules of the National Assembly.

The Bill provides for the amendment of the Income Tax Act, 1962; Customs and Excise Act, 1964; Value Added Tax Act, 1991; Skills Development Levies Act, 1999; Unemployment Insurance Contributions Act, 2002; and the Tax Administration Act, 2011.

Short overview of the changes:

  • Income tax Act: To make technical corrections; to remove a requirement to submit a declaration to a regulated intermediary in respect of tax free investments; to clarify that a penalty may be imposed if an employer submits an incomplete return; and to insert a provision that an executor need not submit a provisional tax return for the provisional period ending on the date of death.
  • Value-Added Tax: To make technical corrections; to remove a requirement that the Minister of Finance must prescribe the particulars to be contained on a tax invoice issued by a foreign supplier of electronic services; and to clarify that rulings under the Act are not subject to the prescribed fee under the Tax Administration Act, 2011.
  • Skills Development Levies Act: To make technical corrections; to provide for a procedure if an employer has incorrectly indicated the jurisdiction of a SETA; and to align the time periods for a refund under the Act with the Tax Administration Act, 2011.
  • Unemployment Insurance Contributions Act: To align the time periods for a refund under the Act with the Tax Administration Act, 2011.
  • Tax Administration Act, 2011: To make technical corrections; to extend the notice period prior to the institution of legal proceedings; to clarify that an assessment or decision is final if an appeal is withdrawn; to clarify when SARS may make an assessment based on an estimate if no return is submitted or required; and to align the provisions regulating the tax compliance status of a taxpayer with the automation thereof.

To view the government notice, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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OCTOBER 2019 – SOUTH AFRICA
COMMENCEMENT OF SECTIONS OF THE LABOUR LAWS AMENDMENT ACT, 2018

It is important that employers note the following:

The commencement date of some sections of the Labour Laws Amendment Act, 2018

Proclamation No. R 56 of 2019 was published in Government Gazette No. 42805 on 29 October 2019 to announce the commencement date of the sections regarding the new Parental leave and Commissioning Parental leave.

This means that employees can start making use of the parental and commissioning parental leave as from 1 November 2019.

The sections of the Labour Laws Amendment Act, 2018 which will take effect on 1 November 2019, are as follows:Section 8(a)(cA): Section 12 of the Unemployment Insurance Act, 2001, is amended by adding parental benefits and commissioning parental benefits.

    • Section 8(a)(cA): Section 12 of the Unemployment Insurance Act, 2001, is amended by adding parental benefits and commissioning parental benefits.
    • Section 11: The right to parental benefits is inserted in the Unemployment Insurance Act, 2001, after section 26.
    • Section 15: Section 58 of the Unemployment Insurance Act, 2001, is amended by adding parental and commissioning parental benefits in subsection (12)(c).
    • Section 16: The title of the Unemployment Insurance Act, 2001, is amended by adding parental and commissioning parental benefits to be provided for, for payment from the Fund.

To view the Proclamation in Government Gazette No. 42805, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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OCTOBER 2019 – SOUTH AFRICA
MEDIUM TERM BUDGET STATEMENT

It is important that employers note the following:

South Africa Medium-Term Budget Policy Statement 2019

The Minister of Finance, Minister Tito Mboweni, delivered the Medium-Term Budget Policy Statement on Wednesday, 30 October 2019.

Fiscal goals and projections for the economy, as well as the risks facing the country were addressed.

Highlights summarised

  • Economic growth is forecast at 0.5% in 2019 compared to the 1.5% expected in February. Growth is projected to slowly rise to 1.7% in 2022.
  • E-tolls are here to stay, and the government plans to enforce compliance
  • Total revenue shortfall for 2019-2020 will amount to R52.5 billion compared with the 2019 Budget estimates. This could result in job losses, lower wage settlements, smaller bonuses and a decline in income tax collection.
  • Tax collection is expected to total R1.37 trillion this year, which is R53 billion (or 4%) less than expected.
  • National debt exceeded R3 trillion. It is expected to rise to R4.5 trillion over the next three years. Without any policy adjustments, debt will most likely exceed 71% of GDP by 2022/2023.
  • The National Treasury, in partnership with the Department of Public Enterprises, is instituting a series of measures to instil discipline in Eskom’s finances. Debt relief will only be considered once operational efficiencies have been achieved.
  • The consolidated budget deficit averages 6.2% of GDP over the next three years.
  • Regarding economic growth, the current account deficit is expected to remain at 3.5% of GDP over the next three years, reflecting low import growth due to weaker domestic demand.
  • Almost half of all projected spending is allocated to social grants, education and healthcare, which will receive R3 trillion alone over the next three years.
  • The rollout of the National Health Insurance (NHI) Bill will require an additional R33 billion annually from the 2025/26 financial year. Treasury and the health department are still in discussions around NHI.
  • Luxury expenses are being withdrawn from politicians. This includes salary freezes, cuts in taxpayer-funded cars, clamp downs on expensive phones, no more business class flights and restrictions on travel and subsistence expense claims.
  • R2.3 billion will be allocated to fighting crime and tax avoidance.
  • The South African Reserve Bank will not be nationalised as it kept inflation stable during a difficult period. The bank also declared a substantially increased profit share to the government.
  • The official unemployment rate has increased to 29%, up from 27% a year ago.
  • The mid-term Policy Statement does not include detailed spending plans or tax proposals. This will be announced during the annual Budget Speech in February 2020.

To view the Medium-Term Budget Policy Statement (MTBPS), follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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OCTOBER 2019 – LESOTHO
INCOME TAX CREDIT CHANGE

It is important that employers note the following:

Changes to the Second Schedule in the Income Tax Act 1993 – Annual Tax Credit

Legal Notice 84 of 2019 was published on 3 October 2019 regarding changes to the Second Schedule in the Income Tax Act 1993 (as amended) and became effective on 1 October 2019.

The law provides for an individual to be granted a non-refundable tax credit. A tax credit is a rebate or relief granted by law to individuals who made taxable income for the year of assessment. It is directly deductible from the amount after applying the applicable marginal tax rates to the chargeable income. The non-refundable tax credit has been increased from M7,260 to M9,600 per annum, effective 1 October 2019.

No changes were made to the lower tax threshold.

To view the legal notice, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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OCTOBER 2019 – ZAMBIA
NEW NATIONAL HEALTH INSURANCE FUND

It is important that employers note the following:

National Health Insurance Fund Implementation

Following the approval of the National Health Insurance Act, 2018 in April 2018, the implementation thereof has been delayed while awaiting the publication of the Statutory Instrument indicating the regulations and effective date.

Statutory Instrument (SI) No. 63 of 2019 was published on 20 September 2019, announcing the effective date as 1 October 2019.

Registering
An employer must register an employee with the National Health Insurance Management Authority as a member. To register an employee, Form I as set out in the First Schedule of SI No. 63 must be used.

An employee means any person who has entered into or works under a contract of service, whether the contract is expressed or implied, is verbal or in writing, and whether the remuneration is calculated by time or work done or is in cash or kind.

Persons employed under a contract of apprenticeship made in accordance with the Apprenticeship Act, or a casual employee cannot be registered as a member.

Contributions
An employer must pay to the scheme a contribution consisting of the employer’s contribution and the employee’s contribution at the rates below (as set out in the Third Schedule of the SI):

Reporting

  • Employee: 1% of the basic salary
  • Employer: 1% of the basic salary

An employer must pay, on or before the 10th of the following month, the contributions deducted in a month.

The specifications regarding the reporting is not set out in the SI, therefore it is recommended that the following information be reported:

Employer:

  • Business or company name
  • NHIMA identification number
  • Employer type
  • Physical address
  • Date of registration
  • Number of employees
  • Contact details – phone and email

Employee:

  • Surname
  • First name
  • Other names
  • Employment number
  • NRC or passport number
  • Membership number
  • Date of birth
  • Sex
  • Marital status
  • Occupation
  • Engagement date with current employer
  • Basic salary
  • Contribution

For more information, visit the Ministry of Health website

 

Contact our legislation team at info@crs.co.za if you require any additional information.
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OCTOBER 2019 – SOUTH AFRICA
EMPLOYMENT EQUITY AMENDMENT BILL 2018 UPDATE

It is important that employers note the following:

Employment Equity Amendment Bill 2018 expected to be tabled soon

Currency reforms

In a statement delivered by the Commission for Employment Equity (CEE) on Wednesday, 9 October, the CEE said that the bill is expected to be tabled in parliament before the end of October 2019 to further establish and increase transformation in the workplace.

The Employment Equity Amendment Bill, 2018 and the Draft Employment Equity Regulations, 2018 were published for public comment for 60 days from 21 September 2018 to 20 November 2018.

The amended Employment Equity Bill would empower the Labour Minister to regulate sector-specific employment equity targets and promulgate Section 53 of the Act to enable the issuing of Employment Equity compliance certificate as a prerequisite for accessing state contracts.

A summary of the proposed changes include:

The definition of a “designated employer” changes by removing paragraph (b) of the definition: “(b) a person who employs fewer than 50 employees but has a total turnover that is equal to or above the applicable annual turnover of a small business in terms of Schedule 4 of this Act”.

In short, this means that all employers with less than 50 employees will be excluded from Chapter 3 of the Employment Equity Act, No. 55 Of 1998 (Affirmative Action) and will no longer have to submit an annual Equity plan.

The following definition is inserted after the definition of “Minister”: National Minimum Wage Commission means the Commission established in terms of the National Minimum Wage Act, 2017 (Act No of 2017)

The following definition is inserted after the definition of “Republic”: sector means an industry or service or part of any industry or service

The following definition is inserted after the definition of “suitably qualified person”: “the state means-

  • A national or provincial department as defined in the Public Finance Management Act, 1999 (Act 1 of 1999);
  • A municipality or municipal entity as defined in the Local Government Municipal Systems Act of 2000 (Act 32 of 2000);
  • A constitutional institution as defined in the Public Finance Management 1999 (Act, 1999 (Act 1 of 1999);
  • Parliament;
  • A provincial legislature;
  • Any entity listed in Schedule 2 and 3 of the Public Finance Management Act of 1999 (Act 1 of 1999).”

Section 14 of the principal Act (Voluntary Compliance) is deleted. This means that in terms of section 53 (State Contracts), employers with less than 50 employees will no longer be able to participate in a government tender, however, small employers can still be issued with a Certificate of Compliance to enable them to do business with Government, provided they comply with Chapter 2 of the EE Act (Unfair Discrimination) and the National Minimum Wage Act.

A new subsection, section 15A has been added to Chapter 3, Section 15 (Affirmative action measures) of the Act. Section 15A (Establishment of sectoral targets) has been added to specify numerical targets for any sector or part of a sector. This means:

  • The Minister may publish a notice in the Gazette identifying national economic sectors for the purposes of the EE Act, having regard to any relevant code contained in the Standard Industrial Classification of all Economic Activities published by Statistics South Africa.
  • The Minister may, by notice in the Gazette, set numerical targets for any sector or part of a sector identified. The notice issued may set different numerical targets for different occupational levels or regions within a sector or on the basis of any other relevant factor.

The Minister may also issue regulations prescribing the criteria to be considered in determining a numerical target.

Section 53 (State Contracts) of the EE Act is amended by the insertion of a new subsection (6) which states:

  • “The Minister may only issue a certificate in terms of subsection (2) if the Minister is satisfied that the employer:-
    (a) has met any sectoral targets in terms of section 15A that applies to it or has provided reasonable grounds, as contemplated by section 42(4), justifying its failure to comply;
    (b) has submitted a report in terms of section 21;
    (c) has not been found by the CCMA or a court within the previous twelve months to have:-
    (i) breached the prohibition on unfair discrimination in Chapter 2; or
    (ii) failed to pay the national minimum wage in terms of the National Minimum Wage Act, 2017 (Act of 2017).”

To view the Employment Equity Amendment Bill 2018, follow the link 

 

Contact our legislation team at info@crs.co.za if you require any additional information.
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RS Technologies (Pty)Ltd. All Rights Reserved.

SEPTEMBER 2019 – ZIMBABWE
CURRENCY REFORMS AND TAX CHANGES

It is important that employers note the following: 

Changes to tax rates due to currency reforms

Currency reforms

Statutory Instrument (SI) 142 of 2019, published as part of the Reserve Bank of Zimbabwe (Legal Tender) Regulations 2019, declares that the Zimbabwean dollar will be the sole currency for legal tender purposes, effective 24 June 2019.

The RTGS (Real Time Gross Settlement) dollar was introduced in February as a first step towards a new currency by year’s end. RTGS dollar means any funds held as bank deposits under the RTGS system established in terms of the National Payment Systems Act. Bond notes and RTGS dollars are at par with the Zimbabwe dollar (ZW$).

Other currencies, specifically US dollars, British pounds, South African rand and Botswana pula, are no longer legal tender. Even though SI 142 is valid, it does not expressly state that foreign currencies cannot be used in transactions or to price goods.

Tax changes

As a result of the currency adjustments, the Minister of Finance and Economic Development, Hon Prof Mthuli Ncube, announced in the 2019 mid-year budget review and supplementary budget, delivered in August 2019, a review of the tax-free threshold from the current ZW$350 to ZW$700 and widening of the tax bands to a maximum of ZW$30 000, above which income is taxed at the marginal tax rate of 40%, including separate US$ and ZW$ tax tables. This took effect on 1 August 2019.

Employees who earn in foreign currency will, however, continue to settle their tax liability in foreign currency. Every enactment in US$ is to be construed to be ZW$ at a rate of 1:1.

A new Final Deduction System (FDS) year of assessment came into effect on 1 August 2019 and ends on 31 December 2019. Taxpayers will be required to submit two annual income tax returns (ITF16s) for 2019.

Annual Tax Rates before and after 1 August 2019:

 

Contact our legislation team at info@crs.co.za if you require any additional information.
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SEPTEMBER 2019 – SOUTH AFRICA EMPLOYMENT EQUITY EEA4 FORM

It is important that employers note the following:

Changes to the Employment Equity EEA4 Form

In August 2019 the Department of Employment and Labour repealed the old EEA4 form, as published in the Employment Equity Regulations of 1 August 2014, and replaced it with a new version. The new form became effective on 8 August 2019.

The EEA4 form generally contains the format for reporting income differentials to the Employment Conditions Commission.

The Department of Labour stated that the old form is ineffective. The main purpose of the new form is to enable companies to analyse salary information pertaining to employment equity more diligently and provide reasons for income differentials to reduce the remuneration gap between the highest and lowest paid employees.

Two new sections, section D and E, have been added to the EEA4 form. Section D requires the remuneration of the employee with the highest total remuneration, i.e. fixed/guaranteed and variable remuneration, in terms of race group and gender for all the occupational levels, except the lowest occupational level in a company. Section E requires the average/median remuneration and the remuneration gap.

The new format specifically focuses on the following:

  • Reporting on fixed/guaranteed annualised salaries per occupational level, race and gender.
  • Reporting on variable annualised salaries per occupational level, race and gender.
  • Reporting on average annual pay for the top 10% of an organisation’s workforce.
  • Reporting on average annual pay for the bottom 10% of an organisation’s workforce.
  • Reporting on average annual pay for the middle earners of an organisation’s workforce.
  • Reporting on whether an organisation has a policy in place which addresses and closes the vertical gap between the highest and lowest paid employees.
  • Reporting on whether the remuneration gap between the highest and lowest paid employees in an organisation is aligned with remuneration policy.
  • Indicating whether affirmative action measures to address remuneration gaps are included in the organisation’s Employment Equity Plan.

Employers are required to complete the EEA4 form and submit it with the EEA2 form when they complete their employment equity reports.

The report can be submitted between 1 September 2019 and 15 January 2020.

To view the Government Gazette containing the new form, follow the link, selecting 42627 8-8 Labour under Separate Gazettes.

Contact our legislation team at info@crs.co.za if you require any additional information.
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SEPTEMBER 2019 – SOUTH AFRICA
NEW VERSION OF PAYE BRS PUBLISHED

It is important that employers note the following:

SARS PAYE BRS for Employer Reconciliation (2019 release) version 18.0.5 published 

The latest SARS PAYE Employer Reconciliation Business Requirement Specification (BRS) was published on Wednesday, 4 September. The requirements in this version of the BRS will become effective from September 2019 until it is replaced by an updated version.

Minor changes regarding discrepancies identified (indicated in red in the BRS) during the BETA testing cycle of the PAYE filing season 2019/2020 were made.

A summary of the sections where changes were made is as follows:

Employer information section:

  • Code 2037 – Diplomatic Indemnity Indicator:
    The wording “years of assessment” has been replaced with transaction year in the sentence “From 2020 transaction year, this field is mandatory”.

Employee remuneration information:

Changes in validation rules.

  • Code 4150 – Reason code for IT3(a) – Reason for non-deduction of tax:
    Value 3 or 03 is only valid if code 3616/3666 or 3620/3670 (code 3690 in previous BRS) has been completed
  • Validation rule “Value 7 or 07 is only valid from 2005 year of assessment and if code 3619/3669 has been completed”, has been replaced with:
    • Value 7 or 07 is [only] valid from 2005 to 2016 years of assessment.
    • Value 7 or 07 is valid from 2017 year of assessment if code 3619/3669 has been completed.

To view the new BRS, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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RS Technologies (Pty)Ltd. All Rights Reserved.

AUGUST 2019 – SOUTH AFRICA
NEW VERSION OF PAYE BRS PUBLISHED
It is important that employers note the following:

SARS PAYE BRS for Employer Reconciliation (2019 release) version 18.0.4 published

The latest SARS PAYE Employer Reconciliation Business Requirement Specification (BRS) was published on Monday, 19 August. The requirements in this version of the BRS will become effective from September 2019 until it is replaced by an updated version.

Minor changes regarding discrepancies identified during the testing cycle of the PAYE Filing Season 2019/2020 project were made in the PAYE BRS V18.0.4. The detail of these changes is highlighted in grey in the BRS.

A summary of the sections where changes were made is as follows:

Employer information section:

  • Employer Contact Person: Cell No:
    Must be at least 10 characters long.
  • Employer SEZ Code:
    The wording “Year of Assessment” has been replaced with “Transaction Year”.
  • Diplomatic Indemnity Indicator:
    The wording “Years of Assessment” has been replaced with “Transaction Year”.

Deduction codes:

  • Code 4582:
    The wording “This code must not be printed on the IRP5/IT3(a) certificate” has been removed.
  • Code 4583:
    The wording “This code must not be printed on the IRP5/IT3(a) certificate” has been removed.

To view the new BRS, follow the link

Contact our legislation team at info@crs.co.za if you require any additional information.
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RS Technologies (Pty)Ltd. All Rights Reserved.