Tag: South Africa

Who pays taxes in South Africa?

National Treasury and the South African Revenue Service (SARS) have published the annual Tax Statistics for 2020.

The 2020 edition provides an overview of tax revenue collections and tax return information for the 2016 to 2019 tax years, as well as the 2015/16 to 2019/2020 fiscal years.

The highlights of the statistics include:

  • Tax revenue collected amounted to R1 355.8 billion, growing year-on-year by R68.1 billion (5.3%), mainly supported by Personal Income Tax (PIT) which grew by R35.3 billion (7.2%).
  • 1,776,301 (40.9%) of assessed taxpayers were registered in Gauteng;
  • 580,464 of assessed taxpayers lived in the Johannesburg Metro and were taxed on an average taxable income of R512,785;
  • 1,171,410 (27.0%) of assessed taxpayers were aged between 35 to 44 years;
  • 2,352,902 (54.2%) of assessed taxpayers were male and 1,985,021 (45.8%) were female;
  • The assessed taxpayers had aggregate taxable income of R1.6 trillion and a tax liability of R360 billion. Their average tax rate was 22.5% compared to 21.6% in the previous tax year;
  • Income from salaries, wages and other remuneration, as well as pension, overtime and annuities, accounted for 77.6% of total taxable income;
  • Out of the 780,480 companies assessed as at the end of July 2020 for tax year 2018, 25.2% had positive taxable income;
  • 46.6% had taxable income equal to zero and the remaining 28.2% reported an assessed loss.

 

What Black Friday shoppers want this year

Source: Finder.com

‘Tis the season to spend and save, with festive sale events like Black Friday and Boxing Day fast approaching. So how many people in South Africa are planning to hit the sales this year? And how much of a discount will entice them to shop?

Financial comparison site  Finder.com polled 1 524 South African adults to find out, and according to the research:

  • Men are more interested in shopping the sales than women
  • Millennials are more likely to be enticed by a discounted item
  • South Africans have a favourite retailer
  • People are looking to save on family-oriented products

70% of South Africans will be shopping this year’s festive sales if the price is right. That’s the equivalent of around 27-million people. On average, it’ll take a discount of 52% to make South African customers purchase an item.

Men are more interested in shopping the sales than women
Men are slightly more likely to be enticed by the sales than women, with 73% of South African men saying they’ll shop for an item for the right price compared to 68% of women who said the same.

It looks like men are more tempted by smaller discounts too. About 22% of men say that a discount of 5-25% off would be enough to motivate them to make a purchase, compared to just 14% of women.

Millennials more likely to be enticed by a discounted item
Those aged 25-34 are most likely to purchase a discounted item in the sales compared to all other age brackets. 76% of people in this age range say they’ll purchase an item on sale at the right price, while just 61% of 55-64-year-olds and those aged 65 and above say the same.

Those aged 18-24 need the deepest discounts of at least 55% to entice them to shop. Other age brackets say they’ll purchase an item if it’s discounted by anywhere from 47% to 53%.

Who are the most popular retailers in South Africa?
Search volume data from Ahrefs suggests that one of the most popular places for South Africans to go for Black Friday deals is online platform Takealot. Other popular online shopping destinations include Makro, Game, Checkers and Hi Fi Corp.

South Africa’s most searched retailers are:

  • Game
  • Makro
  • Takealot
  • Checkers
  • Pick n Pay
  • Evetech
  • Incredible Connection
  • HiFi Corp
  • Edgars

What are people looking to buy on Black Friday?

In terms of specific products, search volume data from Ahrefs suggests that South Africans have historically looked for deals on flights, though 2020 will probably dampen people’s interest in travel. Other popular items include gadgets, specifically laptops, the PlayStation 4, phones and the Xbox.

In terms of branded searches, telecommunications company Vodacom is one of the most common brands specifically searched for on Black Friday, along with Telkom and Kulula.

How does South Africa compare?

Of the 12 countries included in this study, South Africa ranks first for the highest percentage of people who will be enticed by the sales (70%). This is followed by France (66%). Meanwhile, Italy has the smallest number of festive sales shoppers (50%), followed by New Zealand (53%) and the UK (56%).

However, in terms of the discount required to entice shoppers, Spanish adults actually require the highest discount of 60% off to motivate a purchase. People from France and Mexico also require steep discounts to entice them to shop, at 59% off and 58% off respectively. Meanwhile, Canadians say they’ll need the smallest average discount at just 42% off, followed by people in Hong Kong (44% off) and Ireland (45% off).

Which country has the most Black Friday shoppers?
Black Friday is synonymous with hoards of Americans breaking through the front doors of stores all across the country. But as far as the Internet is concerned, the US no longer has the top spot for Black Friday shoppers.

Brazil is the country with the highest search interest in Black Friday, according to an analysis of historical search data from SEMrush. Interest in the shopping holiday peaked and hit new highs in November 2020, jumping up 22.36% from the previous year. Brazil also accounts for 13.20% of all global searches for the term “Black Friday”.

The US doesn’t place silver either: that post is taken by France. Like Brazil, France also saw a jump in search interest year-on-year, jumping 22.22% between November 2019 and November 2020. France makes up 10.78% of all searches for the term “Black Friday”, which is quite impressive, considering that France only accounts for 0.84% of the population.

The US doesn’t even get the bronze on its own, sharing the podium with Germany for the second year in a row, with search interest in both nations increasing by the same amount over the last 12 months (22.28%). Both nations made up 8.82% of the search volume for the term “Black Friday”, but Germany is far outperforming in terms of its population size, with Germany accounting for 1.07% of the world’s population, compared to the 4.25% that the US represents.

South Africa ranked equal 27th overall for Black Friday search volume. Search volume has increased by 22% from November last year to November 2020.

SA moves to Level 1

Source: BBC

President Cyril Ramaphosa last night announced that, following consultations with health experts and officials from across South Africa, the country would lower its current alert Level 2 to Level 1 from midnight on 20 September.

This means that, as of Monday 21 September:

  • Social, religious, political and other gatherings will be permitted, as long as the number of people does not exceed 50% of the normal capacity of a venue, up to a maximum of 250 people indoors and 500 people outdoors
  • The maximum number of people who can attend a funeral is increased from 50 to 100
  • Venues for exercise, recreation and entertainment – such as gyms and theatres – currently limited to 50 people, will be allowed to accommodate up to 50% of their venue’s capacity
  • The national 22:00 – 04:00 curfew will start two hours later
  • Alcohol will be permitted for on-site consumption in licensed establishments
  • International travel would resume from 1 October. Those arriving in South Africa must present a negative coronavirus test taken within three days of travel.

A further stimulus package was being drawn up to rebuild an economy that has been savaged by the lockdown.

By Mfuneko Toyana for Reuters

Africa’s most industrialised nation has been hit hard by the COVID-19 pandemic, recording the seventh-largest number of cases worldwide, although it has seen fewer deaths than some other badly affected countries.

Analysts polled by Reuters had predicted a 47.3% contraction because of the lockdown restrictions, which were among the harshest in the world.

“This is the first time in history that the South African economy has contracted for four straight quarters,” Statistician-General Risenga Maluleke told a news conference.

The rand fell roughly 1% against the dollar on the dismal data to trade at 16.9325 per dollar.

Joe de Beer, another top official at Statistics South Africa, said that after adjusting for inflation the economy was roughly the same size in the April-June quarter as in the first quarter of 2007.

Most sectors declined steeply except for agriculture, which grew 15.1% in the second quarter from January-March, helped by fruit and nut exports, and better-than-average winter rainfall.

Mining declined 73.1%, manufacturing 74.9% and construction 76.6%. Gross domestic product (GDP) for the whole economy shrank 17.1% from the same period in 2019.

Jeff Schultz, economist at BNP Paribas, said the global impact of the pandemic coupled with the recent return of power cuts by ailing state utility Eskom would hamper any economic recovery.

“It will take a very long time to get to pre-pandemic levels,” he said.

The government expects a GDP decline of at least 7% in 2020, a worrying prediction in a country where unemployment was at around 30% before COVID-19.

Pamela Mutandwa, 37, who runs a roadside vegetable stand in Pretoria, said times were hard. “It was really difficult during lockdown. There were no people buying and I struggled. When I opened in 2009 there were more customers.”

Tlouama Abrama, 31, a petrol attendant, said he was disappointed by the government’s economic policies. “They should be doing more to revive the factories around here so people can get jobs. Their policies are not working.”

Source: Evina

Extensive data collection and analysis has lead to the Paris-based anti-fraud firm Evina determining that one out of every three mobile subscription attempts in South Africa is fraudulent.
South African cellular users are very often subscribed to mobile services without their consent.

After Kenya, South Africa is the African country most affected by fraud that daily fleeces millions from the mobile accounts of cellular users around the globe.

“As Africa’s most advanced economy, it is particularly tragic that South African mobile users are falling victim to subscription frauds that are well managed in many other countries,” says David Lotfi, CEO of Evina.

This when consumers across the globe are under significant financial pressure following the worst of the Covid-19 pandemic.

Fraud is not treated seriously enough by the various mobile payment actors and this can be seen in the fact that 31% of mobile subscription requests in South Africa in July were fraudulent.

This is deeply concerning and the solution is not to block mobile value-added subscriptions by default but to manage the problem with better tools and expertise.

South Africans are mostly at risk from a very basic fraudulent mobile activity, clickjacking.

This is a malicious technique tricking a user into clicking on something different from what the user perceives, thus potentially revealing confidential information.

“Clickjacking is a type of mobile-based fraud that is more than five years old and could be blocked very quickly if local market players took this threat seriously,” Lotfi says.

To a lesser extent, South African mobile users are also targets of a whole range of nefarious applications commonly available for app store download and these include everything from flashlight to wallpaper, pedometer, file manager and video maker apps.

A recent study has highlighted the devastating impact the Covid-19 pandemic and subsequent economic turmoil has had on the people of South Africa.

The study by United Nations Development Programme (UNDP) on the socio-economic impact of Covid-19 in the country highlights the following:

  • The country’s overall GDP is expected to decline by at least 5.1% and up to 7.9% in 2020
  • The number of households below the poverty line will increases as households fall from the lower-middle class into vulnerability
  • 54% of households that have been pushed out of permanent jobs to informal or temporary contracts are likely to fall into poverty
  • As many as 34% of households are likely to exit the middle class
  • The real average monthly take-home pay in the private sector is R14 197, according to BankServ
  • The vast majority of South Africans operate in an informal sector, with salaries closer to R6 000 per month
  • South Africa’s minimum wage is around R3 500 per month
  • South African households were already getting poorer thanks to rising food prices and the general cost of living
  • The middle-high to high-income category only makes up 2.5% of the South African credit active population
  • Middle income made up 9.3% of the credit active population
  • 55.5% of South Africans live below the national poverty line, but that number is likely to grow

By Jan Vermeulen for MyBroadband

Amazon announced in June that it was hiring 3 000 new customer service agents in South Africa. The company was looking for skills ranging from basic computer literacy to technical experts.

These new employees are required to work from home and provide support to Amazon customers in North America and Europe.

This means you needed access to a high-speed ADSL or entry-level fibre connection to your home, and to be willing to work shifts the coincide with North American business hours. Some job listings explicitly state a 10Mbps minimum line speed and that LTE connections are not suitable.

According to Amazon, the addition of these 3,000 permanent and seasonal full-time positions will bring the company’s total permanent workforce in South Africa to 7,000.

MyBroadband recently had the opportunity to interview a successful applicant for one of Amazon’s customer service roles, who spoke to us on condition of anonymity. The interview was conducted in person and we were able to verify the authenticity of the claims made.

Impressive, efficient systems
The first thing our jobseeker noted was that every stage during his application and training process was like clockwork.

Amazon communicated what was required at every step and everything was streamlined for efficiency.

After the application through the Amazon jobs website, there was about a week’s wait before the applicant heard that he had made it through the initial screening stages.

Amazon asked whether he was still interested in the position. If he was still interested, he was informed that he needed to complete an aptitude test.

Aptitude testing
This extensive aptitude test is conducted online and took about two hours to complete.

Amazon tested for fluency in English, and reading and listening comprehension.

It then placed the applicant under pressure by having them listen to a scenario where a customer was complaining about something. The recording may be paused at any moment and they were required to answer questions such as “When was this item meant to arrive?”

As he was listening to the customer complaint, Amazon would also pop up perception questions like “Is this customer happy?”

Gruelling training
Another week after the aptitude test, Amazon responded with a job offer. It contained the conditions of employment, salary, and details on company perks like a medical aid, provident fund, and Internet allowance.

Our customer service associate-in-training said that they were given an allowance of R1 200 which had to be put towards their Internet connection.

His total pay package was around R12 000 per month.

The corporate medical aid was provided through Discovery and the provident fund through Momentum.

After accepting the offer, he received a call from an Amazon manager who congratulated him on his appointment.

Two weeks later, he received an email on a Thursday stating that he would receive everything he needed the following day and that his training would begin that Monday. The email also contained instructions on how to set up his equipment.

On Friday morning, a courier arrived with a Lenovo all-in-one computer, an uninterruptible power supply, and a set of hardware security keys. The computer was configured so it could only be used for Amazon.

On Monday morning at 08:00, our trainee was online with a group of 30 other people, a training officer, and his assistant.

They spent eight hours a day in a rigorous and strict training programme.

“Amazon expects a very high level of self-discipline,” he said. “During training, being absent is just not an option.”

If someone was not online at precisely 08:00 in the morning when training was scheduled to start, it was no small issue. The training officer was immediately on the phone to the absent trainee to find out what was going on.

Long hours, strict self-discipline
Trainees were told that after they completed the programme, their working schedules would be quite rigid.

To serve the North American market, your shift in South Africa would begin between 16:00 and 19:00 in the evening and run for eleven hours until the following morning.

This includes an unpaid lunch hour and two paid 15-minute tea breaks.

When you step away from your workstation to take a break, you must set your status as being on a break. If you couldn’t take your break at the scheduled time because you were finishing up a call, you must note that in the system.

Trainees were also informed that they should prepare for the fact that during the first six months of work they will not be able to swap shifts with other customer service associates.

Performance monitoring
Once you graduate from training and you begin working, Amazon monitors your performance.

However, this is not a fixed number applied to all customer support agents. Amazon makes provision for new recruits to go through a period of improving as they become more familiar with the job.

“Everything is measurable,” the interviewee said. “You set a baseline performance level in that first week.”

As long as you are always improving, Amazon is happy. The company also works hard to try and retain staff, he said.

Exit procedure
The person we interviewed did not end up becoming an Amazon staff member. They bowed out during training for personal reasons, and because they felt they would not be able to multitask at the pace needed to excel at the job.

He explained that during training, he learned that they would be required to look up information related to a customer’s query in the Amazon knowledge base for support agents while on a call, and then proceed based on the guidelines provided.

“It’s extreme multitasking,” he said.

When he informed Amazon that he did not wish to continue, there was genuine concern. They wanted to know if they had done something wrong and whether they could be clearer in explaining what the job entailed so applicants would know exactly what to expect.

He was also caught off-guard when Amazon said they would pay him for the time he spent in training.

“It was truly impressive,” he said. “It would be great if South African companies could operate at this level of efficiency.”

South Africa is in deep financial trouble

Source: MyBroadband

The South African government is spending nearly R50-billion a month more than what it collects in taxes – and the situation is getting worse.

This is the warning from economist Mike Schussler, who said rapidly-increasing government debt is creating a “very, very deep hole”.

Speaking to eNCA, Schussler said the government’s budget reveals that the country is heading to a deficit of between R60 billion and R65 billion per month.

“This means we are spending R2 billion per day more than what we get in income from taxes,” he said.

Schussler said that while COVID-19 and the lockdown has aggravated the situation, the country was already running at a big deficit before the pandemic hit.

The projected deficit for this year was expected to be around R325 billion, but the pandemic has pushed this up to between R710 billion and R800-billion.

The higher deficit is a result of lower tax collection – which is expected to be down by around R313 billion – and higher spending on grants, hospitals, and other COVID-19 related matters.

Schussler said the lower tax collections are also partly a result of the cigarette and alcohol ban, people driving less, people losing their jobs, and lower consumer spending.

Filling the hole
The combination of lower tax collections and higher government spending is resulting in a big debt burden for South Africa.

To fill this hole, the government has to borrow money – which comes at a higher cost because of the country’s recent credit rating downgrades.

“Because of the downgrades our debt is becoming more and more expensive,” said Schussler.

An IMF loan of around R70 billion covers 10% of the expected deficit, which comes at a low interest rate.

This gives the country some breathing room, but big spending cuts and tax increases are still required to make up this deficit.

Even with the loans from the New Development Bank and African Development Bank, the country will still have to raise a lot more money to cover the growing deficit.

“We will have to go back to the IMF, we will have to look at our pension funds, and we most likely have to enter the international markets again,” said Schussler.

“We are in very, very deep financial trouble in the next few years. It is a very difficult hole to get out of.”

The chart below, published by Schussler, shows the government’s monthly budget deficit in recent years.

In addition to the inevitable jobs and livelihoods lost due to the Government’s ban on alcohol, South Africa has also lost R13.3-billion in investments.

SAB

  • SAB has put R5-billion worth of capital investment projects on ice
  • South Africa’s largest brewery is cancelling R2.5-billion in investment for 2020
  • An additional R2.5-billion in investment is being reviewed for 2021, due to the ban
  •  Distell has said that the industry had already lost 118 000 jobs, and projections showed that a nine-week ban now would cost another 84 000 livelihoods
  •  The tax loss from the first six-week ban on alcohol sales came to R15.4-billion
  • If the current ban remains in place for nine weeks, another R13-billion would be lost

Consol

  • Glassmaker Consol has suspended construction of a R1.5-billion glass manufacturing plant that it was due to build in Erkhuleni, Gauteng
  • In additon, Consol has halted R800-million worth of furnace upgrades
  • Consol maintains that the alcoholic beverages industry accounts for about 85% of glass sales, and that the South African glass industry will see a 15% decline over the next 12 months
  • The new manufacturing plant would have added 130 000 tons of glass production to Consol Glass’s capacity
  • It was anticipated to create 120 direct job and approximately 2 600 additional employment opportunities across the value chain

Heineken

  • Heineken, the world’s second-largest beer brewer, has shelved R6-billion in planned investment
  • A new brewery was to be built on the KwaZulu-Natal north coast
  • It was expected to create more than 400 permanent jobs

National Treasury now estimates that job losses could be between 690 000 and 1.79-million due to the impact of the Covid-19 pandemic on the South African economy.

The 690 000 job losses are likely in the event of a quick recovery; the larger figure is a worst-case scenario.

The sectors that will see the largest impact are likely to be:

  • Manufacturing;
  • Construction;
  • Trade;
  • Catering and accommodation; and
  • Financial and business services.

Avis Budget Rent-a-Car, part of the Barloworld Group, announced that a total of 978 employees would be affected by retrenchment, according to a Fin24 article. This is nearly half of the employees of the company.

Meanwhile, the Bidvest Group’s shares fell more than 5% on Monday after the diversified services and trading company warned of possible job losses as a result of coronavirus-related disruptions across its operations.

This is in addition to running list of companies in South Africa who have gone into business rescue, or foresee retrenchments and job cuts.

These include:

  • Phumelela Gaming and Leisure (currently in business rescue)
  • Afarak Mogale and Afarak South Africa (currently in business rescue)
  • SAA (currently in business rescue)
  • SA Express (currently in business rescue)
  • Edcon (currently in business rescue)
  • Comair (currently in business rescue)
  • Tiger Brands
  • Cell C
  • Pam Golding
  • Prasa
  • Flight Centre
  • SAB

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