Structural Reforms
Government remains committed to structural reforms designed to lower the cost of doing business and create a more competitive economy. Over the medium-term, the following reforms will be accelerated:
Extract from Enoch Godogwana Medium-Term Budget Policy Statement (MTBPS)
The finance minister presented his maiden MTBPS on the 11th of November. Below are some key extracts:
Fiscal Policy
A highly disciplined fiscal policy is to be maintained if we are to enjoy economic growth and stability in the medium to long term. Below are some key points extracted from the Medium-Term Budget Policy Statement (MTBPS):
Economic Outlook
Below is a brief synopsis of the economic outlook as presented at the Medium-Term Budget Policy Statement (MTBPS).
Director’s Role Amidst the COVID 19 Pandemic
The director’s role has without a doubt become more onerous amidst the Covid 19 pandemic. However, the Companies Act makes provision for operating in a virtual world, which includes, inter alia:
Medium Term Budget Policy Statement (MTBPS) set for the 4th of November 2021
Newly appointed Minister of Finance, Mr Enoch Godongwana will table the MTBPS on the 4th of November at 14h00. The MTBPS sets out the policy framework for the Budget that is presented every February, updates National Treasury's economic forecasts, adjusts the budgets of government departments and makes emergency changes to spending.
Interim Dispute Process and Dispute Resolution for PAYE penalties
Penalties for late filing of Pay As You Earn (PAYE) returns was introduced this year. SARS is in the process of enhancing their Dispute Resolution process to allow for this penalty to be disputed separately from a PAYE late payment penalty.
Essential Requirements for a Valid Trust
The structure and essential requirements for a valid trust can be found below:
SASRIA & Fiscal Budget
The South African Special Risks Insurance Association (SASRIA) will form a key part of the intervention to help insured businesses restore their operations. Together with reinsurers, SASRIA has already begun its claim administration process. Pay-outs will be provided to all covered businesses. Crucially, government has decided to provide full financial backing to SASRIA should it exceed its solvency limits. The National Treasury is putting in place the necessary arrangements to ensure that this commitment is met should it be needed.
Amendments to the VAT Act
There have been a number of amendments gazetted this year to the VAT Act. The amendments came into effect on 1 April 2021 unless otherwise stated. A brief summary of some of the more important VAT amendments is provided below:
POPIA – extension granted in terms of Section 58
The Information Regulator (Regulator) announced on 18 June 2021 that they are granting an extension on the application on processing as set out in Section 58(2) from 1 July 2021 to 1 February 2022. It is important to note that this is not an extension of compliance to the POPIA but only refers to the implementation of Section 58(2). Section 58 deals with the requirements that a responsible party must notify the Regulator if processing is subject to prior authorisation.
POPIA Effective 1st July 2021
The Protection of Personal Information Act (no.4 of 2013) (hereinafter referred to as 'POPIA' or 'the Act'), which gives effect to the Constitutional right to privacy in South Africa, commenced on the 1st July 2020. There has been a grace period for one year.
Liability of Directors and Prescribed Officers
Doing business in South Africa can be daunting given the complex raft of regulations and company law. Section 77 codifies liability for directors and prescribed officers. It sets out civil liability (delict and breach of fiduciary duty), and then in sub-section 3, sets out specific statutory liabilities.
POPIA Topic 4
Retention periods:
POPIA Topic 3
The general provisions under POPIA will apply equally to any personal information processed by an employer as part of an employee’s employment, and all employers have until 1 July 2021 to ensure that their workplaces are fully POPIA compliant.
POPIA Topic 2
Codes of Conduct:
WhatsApp - Privacy Policy Update
Early in January 2021, Facebook’s messaging app WhatsApp received massive backlash in relation to an update of its privacy policy which was meant to take effect on the 8th of February 2021. Effectively, the update allows for new functionality to the businesses feature by allowing WhatsApp to reserve the right to share the different data it collects from you to other Facebook based apps.
Budget Speech provisionally set for the 24th of February 2021
Tito Mboweni’s big day looms this month, with little progress on the medium-term budget policy speech. The biggest issue relates to the freeze on government wages to which there has been no resolution yet. Let’s hope that we get finality in the upcoming budget.
POPIA Topic
Personal Information
Re-Commencement Of Companies And Close Corporations Regulatory Compliance Obligations
The Companies and Intellectual Property Commission (CIPC), acknowledges the impact that the COVID- 19 pandemic and the national lockdown, in terms of the Disaster Management Act, has had on companies and close corporations and may continue to have in the near future. With the move of South Africa to lockdown level 1 and the re-start of the economy, it is imperative that all entities re-commence with their regulatory compliance obligations.
Government’s Response To The Rating Actions Of S&P Global Ratings, Fitch Ratings And Moody’s Investors Service
Government’s policy priorities remain on economic recovery and fiscal consolidation, as outlined in President Cyril Ramaphosa’s Economic Reconstruction and Recovery plan and the Medium-Term Budget Policy Statement released in October. The social compact agreed to between government, business, labour and civil society prioritises short-term measures to support the economy, alongside crucial structural economic reforms.
CIPC Releases A Directors Quick Reference Guide
CIPC has released a quick reference guide designed to highlight specifically, although not exclusively, critical issues of the Companies Act No. 71 of 2008 that a director should be aware of. The central message of this guide, which is divided into 10 basic markers, is that a director of a company when acting in that capacity:
Business for South Africa (B4SA) – A plan to Kick-start Growth Inclusive Economic Growth
When Covid-19 arrived in the country at the beginning of March 2020, it was evident from the experience of other countries that this would have significant health, economic and social ramifications for South Africa.
Reserve Bank Economic Outlook
Since the May meeting of the Monetary Policy Committee (MPC), the Covid-19 pandemic continues to spread globally, with wide-ranging and deep social and economic effects. Current forecasts from the IMF show global Gross Domestic Product (GDP) contracting by about 4.9% this year. The deepest contractions are expected in the second quarter of 2020, with gradual recoveries in the third and fourth quarters of the year. The strength of the global economic recovery will depend in part expectations of future growth in investment and productivity.