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As many South Africans adapted to working and studying from home, Telkom was one of the companies enabling connectivity throughout lockdown. Headline earnings per share increased by 25.4 per cent to 219 cents per share for the six months ended September. Group Earnings Before Interest, Taxes, Depreciation, and Amortization rose by 6.3 per cent. Telkom CEO, Sipho Maseko joins CNBC Africa for more.

Telkom CEO on H1 earnings & COVID-19 impact on business

By Piet Nel, SAICA
Project Director, Tax. 



Johannesburg, 30 March 2020 – The President of South Africa, Mr
Cyril Ramaphosa, recently announced a 21-day lockdown period from midnight on
Thursday, 26 March until midnight on Thursday, 16 April 2020 due to the
COVID-19 pandemic. 



The COVID-19
lockdown currently in place will have an impact on tax-related matters.&nbsp;
This includes contact with the South African Revenue Services (SARS), returns
and payments due to SARS, as well as disputes.&nbsp; It also has an impact on
employers and their employees.&nbsp; Whilst a lot of information was available
at the time of writing of this article, it is expected that more information
will be made available over the next couple of days.&nbsp; The following is
based on information that was available on 29 March 2020: 



Contact
with SARS during the period 



SARS advised
taxpayers and tax practitioners to use the online channels such as eFiling, the
SARS MobiApp and e@syFile to interact with SARS.&nbsp; SARS has provided
dedicated email addresses for this purpose on their website.&nbsp; 



It is
envisaged that visits to SARS offices are possible, but an appointment must be
made on the SARS website.&nbsp; Please remember the lockdown restrictions that
are in place when you are travelling to a SARS branch.&nbsp; Remember that
accountants and tax practitioners are not seen as the providers of essential
services.&nbsp; Special rules relating to Customs and border posts were made
available by SARS.&nbsp; 



Submission
of returns&nbsp; 



There is no
relief for the submission of tax returns.&nbsp; Taxpayers must therefore ensure
that returns are submitted on or before the due dates.&nbsp;&nbsp;&nbsp; 



Disputes 



According to a
notice from the Chairperson: Customs and Excise National Appeals, the days
during the period 27 March 2020 to 16 April 2020 will not be taken into account
in determining days or period for purposes of an appeal under the Customs
Act.&nbsp; 



SARS has not
given a similar notice for objections and appeals under the other tax
Acts.&nbsp; Where a taxpayer is unable to comply with a prescribed period
during which steps in the dispute process must be instituted due to the
lockdown, it would constitute exceptional circumstances.&nbsp; 



Payments 



Tax debt:



There is no
relief for the payment of assessed taxes and payment must be made on the due
date.&nbsp; In fact, SARS said that this is a critical period for SARS in terms
of revenue collections and now, more than ever, the country requires everyone
to pay their fair share.&nbsp; SARS requested that payments are made on time
and that COVID-19 uncertainty is not used as a reason for non-payment.&nbsp;
SARS may well continue with their collection procedures of tax debt.&nbsp; 



Where a
taxpayer is unable to make the payment, or can only do so partially, a request
for a deferred arrangement during the lockdown period must be sent to the
dedicated email addresses made available by SARS.&nbsp; 



Other
taxes:



In line with
the announcement by the President, SARS and National Treasury confirmed that
effective 1 April 2020, tax compliant businesses with a turnover of less than
R50 million will be allowed to delay paying a portion of their amounts due to
SARS.&nbsp; The details are as follows: 



Employees’
tax



With respect
to pay-as-you-earn (PAYE) liabilities, tax compliant business with a turnover
of less than R50 million can delay 20% thereof for a limited period of four
months, beginning 1 April 2020 and ending on 31 July 2020.&nbsp; The deferred
PAYE liability must be paid to SARS in equal instalments over the six-month
period commencing on 1 August 2020, i.e. the first payment must be made on 7
September 2020.&nbsp; There is no relief for the March payment due on 7 April
2020.&nbsp; 



Provisional
tax: 



Tax compliant
small- to medium-sized businesses will also be allowed to defer of a portion of
the payment of the first and second provisional tax liability to SARS, for a
period of twelve months, beginning 1 April 2020 and ending on 31 March 2021,
without SARS imposing administrative penalties and interest for the late
payment of the deferred amount.&nbsp; This means that the payment due 31 March
2020 must be made in full.&nbsp; 



The first
provisional tax payment due from 1 April 2020 to 30 September 2020 will be
based on 15% of the estimated total tax liability, while the second provisional
tax payment from 1 April 2020 to 31 March 2021 will be based on 65% of the
estimated total tax liability.&nbsp; Provisional taxpayers with deferred
payments will be required to pay the full tax liability when making the third
provisional tax payment in order to avoid interest charges.&nbsp; 



The proposed
amendments are deemed to have come into operation on 1 April 2020 and apply to
first provisional tax periods ending on or after 1 April 2020 but before 1
October 2020 and to second provisional tax periods ending on or after 1 April
2020 but before 1 April 2021.&nbsp; 



Employment
Tax Incentive (ETI): 



For the period
of four months, beginning 1 April 2020 and ending on 31 July 2020:



<ul><li>The maximum amount of ETI claimable during this four-month period for employees eligible will be increased from R1 000 to R1 500 in the first qualifying twelve months and from R500 to R1 000 in the second twelve qualifying months.  </li><li>Allowing a monthly ETI claim in the amount of R500 during this four-month period for employees from the ages of: <ul><li>18 to 29 who are no longer eligible for the ETI as the employer has claimed ETI in respect of those employees for 24 months; and </li><li>30 to 65 who are not eligible for the ETI due to their age.  </li></ul></li><li>Accelerating the payment of employment tax incentive reimbursements from twice a year to monthly as a means of getting cash into the hands of tax compliant employers as soon as possible.</li></ul>



This will,
however, only apply to employers that were registered with SARS as at 1 March
2020. Further to the above, the current compliance requirements for employers
under sections 8 and 10(4) of the ETI Act will continue to
apply.&nbsp;&nbsp;&nbsp; 



Unemployment
Insurance 



The President
also said that government is exploring the temporary reduction of employer and
employee contributions to the Unemployment Insurance Fund and employer
contributions to the Skill Development Fund.&nbsp; The Unemployment Insurance
Commissioner has developed a Corona Virus Tem­porary
Employer-Employee Relief Scheme (COVID19TERS) to contribute to the containment
of the Coronavirus and its impact.



In terms of
the Temporary Employer/Employee Relief Scheme (TERS) process, the UIF may fund
the distressed companies directly in relation to the TERS Allowance. The
benefits paid will be capped at a 38% to 60% of the maximum of R17 712 per
month and the employee will be paid in terms of the income replacement rate
sliding scale as provided in the Unemployment Insurance Act.&nbsp; The minimum
that will be paid will be a replacement income equal to minimum wage of the
sector concerned.&nbsp; 



Where an
employer, as a direct result from the current COVID-19 pandemic, decided to
close their business for a period and send employees home, this would
constitute a temporary lay-off. If the employer cannot pay his employees for
this period, the employer can apply for the “National Disaster Benefit” from
the UIF.&nbsp; 



Where an
employee has been quarantined for 14 days or longer, the Illness Benefit will
apply.&nbsp; Existing benefits for illness and unemployment will kick in if no
leave is granted.&nbsp; 



Should a UIF
contributor pass on from COVID-19, death benefits will be paid to the
beneficiaries of the deceased.&nbsp; 



Employers
should apply by reporting their closure to the email address: <a href="mailto:Covid19ters@labour.gov.za">Covid19ters@labour.gov.za</a>.&nbsp; 



Value-Added
Tax



SARS announced
that, due to the measures put in place under the Disaster Management Act 57 of
2002, “essential goods” as defined in Regulation R.398 in Government
Gazette No 43148 of 25 March 2020 will be subject to a VAT exemption and a full
rebate of customs duties during the COVID-19 pandemic.&nbsp; 



The
VAT-rulings department at SARS announced that work on rulings in progress will
be delayed. Any correspondence, including new ruling applications submitted to
SARS from 27 March 2020, will be acknowledged or responded to once the
aforementioned measures have been relaxed or ended.



Conclusion 



Employers,
employees, taxpayers and tax practitioners are advised to regularly check the
SARS website for updates on the issues.&nbsp; SARS indicated that it would make
information available to recognised professional bodies to be communicated to
tax practitioners.&nbsp; 



[End]



About SAICA



The South African Institute of Chartered Accountants (SAICA), South
Africa’s pre-eminent accountancy body, is widely recognised as one of the
world’s leading accounting institutes. The Institute provides a wide range of
support services to more than 50 000 members and associates who are chartered
accountants [CAs(SA)], as well as AGAs(SA) and ATs(SA), who hold positions as
CEOs, MDs, board directors, business owners, chief financial officers, auditors
and leaders in every sphere of commerce and industry, and who play a
significant role in the nation’s highly dynamic business sector and economic
development.



SAICA Media Contact



Kulani
Chauke



Communication
Coordinator: Corporate



SAICA Brand
Division 



011 479 0698



<a href="mailto:kulanic@saica.co.za">kulanic@saica.co.za</a>



For more coverage on COVID-19 visit: <a href="https://www.cnbcafrica.com/covid-19/">https://www.cnbcafrica.com/covid-19/</a>

The impact of COVID-19 lockdown on tax and unemployment related matters

STANDARD BANK EXTENDS INSTALMENT RELIEF MEASURES TO
PERSONAL ACCOUNT CUSTOMERS



29 March 2020: Standard
Bank has announced a second wave of relief to help its customer base navigate
financial commitments as Covid-19 continues to impact the livelihood of many
individuals across the country. 



The payment reprieve is aimed at
easing the financial burden of customers earning R7&nbsp;500 or less, who will
receive three-month instalment relief if they are not in arrears on any of
their accounts (as at 31 March 2020). This relief applies to qualifying
customers and their associated accounts, which include home loan, vehicle and
asset finance, credit cards as well as short term loans. Customers who opt for
the relief will see their interest and bank charges capitalised over the term
of their loan agreements. 



This second round of relief comes
after Standard Bank’s announcement last week that it would be instituting
instalment relief for both SMEs and fulltime students who have taken out loans
at the bank. The bank’s small enterprise clients with a turnover of less than
R20 million were granted a three-month instalment relief on their business loan
repayments. The latest instalment relief measure will further assist business
owners who bank with Standard Bank in their personal and business capacity. 



The three-month instalment relief
will be available on 1 April 2020 until end June 2020. Customers need not
contact the bank to initiate the offer, however, customers can continue to pay
their accounts as usual should they not want to take up on the relief offer
made by Standard Bank. 



Our customers’ financial
wellbeing remains our concern. Customers who are in financial distress and not
included in the three-month instalment relief offer, should contact the bank as
soon as possible by email on&nbsp; <a href="mailto:debtcarecentre@standardbank.co.za">debtcarecentre@standardbank.co.za</a>
or call us.



Funeka Montjane, Chief Executive,
Personal and Business Banking, Standard Bank South Africa, says: “At Standard
Bank, we are continuously looking for ways to provide the necessary assistance
to our customers who have been impacted negatively by the Covid-19 pandemic.”



Standard Bank is collaborating
with other government initiatives that have been started to support small
businesses and their employees. Qualifying employers and employees will also
get relief from initiatives like the Solidarity Fund. 



“We are committed to helping
those who are vulnerable at this time. It is critical that we try to ease their
financial burden and do what we can to prevent somebody from losing their home
or having to close their business. We continue to work with the industry and
regulators to ensure that we can solve some challenges systemically and we will
play our part responsibly to support government and the country,” says Ms
Montjane.



Furthermore, the banking sector
has collectively&nbsp;decided to waive Saswitch fees during the lockdown. This
means that a customer can use any ATM, including those offered by competing
banks and only pay the usual fees charged.



Standard Bank continues to evaluate
the current financial climate with a keen focus on how the bank can continue to
guide consumers through these difficult economic times.



“We will work tirelessly to find solutions that ease their financial burden in these times. We are here to help those who contribute to our society so that we can support economic growth in South Africa,” concluded Montjane.

Standard Bank extends instalment relief measures to personal account customers

By Bernardo Vizcaino
Kenya&#8217;s government has unveiled a package of initiatives under its latest budget to develop Islamic finance in the country, as part of efforts to mobilise local funds and set Nairobi as a regional hub for the sector.
The moves could spur Kenya&#8217;s decade-old Islamic banking sector and help the government fund infrastructure in a country where Muslims account for about 10 percent of the population of some 44 million.
Finance Minister Henry Rotich outlined the steps as part of the country&#8217;s 2017/2018 budget, released on Thursday, aiming to level the playing field between Islamic and interest-based transactions.
Amendments to the Public Finance Management Act will also allow the government to issue Islamic bonds, or sukuk, as an alternative funding source.
This could prove useful for a government that has set aside billions for infrastructure, with a fiscal deficit set at 524.6 billion shillings ($5.10 billion).
Implementation could be quick as most changes have already been drafted by the Islamic Finance Project Management Office (PMO), a body setup by the government to coordinate efforts among its regulatory agencies.
&#8220;The primary objective is to prepare the groundwork for a sovereign sukuk but also equally to attract corporate sukuk from the region,&#8221; said Farrukh Raza, managing director of IFAAS, an Islamic finance consultancy which designed the PMO&#8217;s framework.
The government has commissioned IFAAS to run the PMO, which is working with law firm Simmons &amp; Simmons to help develop Islamic Finance in Kenya.
The Treasury has said it is considering a debut sale of sukuk this year, although national elections in August could delay those plans.
http://cnbc.africa/videos/2016/09/22/growth-potential-for-islamic-finance-in-africa/
TAX NEUTRAL
The amendments will benefit Kenya&#8217;s two full-fledged Islamic banks and several Islamic windows, which until now have operated by way of exemptions.
They will be joined by Dubai Islamic Bank, which last month received approval in principle for a banking license from the central bank.
Changes to stamp duty would ensure their products are tax neutral against interest-based transactions, as the asset-based nature of Islamic finance contracts often means they can incur multiple tax charges.
This is designed to be revenue neutral to the government and would not compromise fiscal revenues, said Raza.
Exemptions to value added tax would allow returns from Islamic deposits to be eligible for deductions similar to interest-based products. This would apply to individuals, corporates and government entities, Raza said.
The budget also calls for amendments to cooperatives and savings societies, while new regulations will help setup an Islamic pension scheme based on the risk-sharing concept of takaful.
This would aid the government in achieving financial inclusion and financial diversification targets, Raza added.
http://cnbc.africa/news/2016/11/04/ethiopia-looks-to-islamic-finance-to-tap-domestic-savings/
(Reporting by Bernardo Vizcaino in SYDNEY; Editing by Randy Fabi)
&nbsp;

Kenya’s budget paves way for Islamic finance

Sovereign debt levels and debt servicing costs have risen in sub-Saharan Africa (SSA) in recent years and will continue to do so in 2016 and 2017, Fitch Ratings says. The high share of concessional debt means that interest costs are not excessive for most countries in the region, but their increase makes fiscal consolidation more challenging.
The median general government debt/GDP ratio for Fitch-rated SSA sovereigns climbed from 30.2% in 2011 to 49.7% in 2015. Our country-by-country fiscal projections imply that the median ratio will continue rising, to 51.4% in 2016 and 53.3% in 2017.
Two key drivers are the commodities slump that has led to a sharp decline in fiscal revenues among exporters, and continuing reliance by some sovereigns on infrastructure investment to drive GDP growth. Ghana will use the proceeds of this month&#8217;s USD750m Eurobond to refinance existing debt and fund capital investments. Central government capex will exceed 10% of GDP this year in Rwanda, Uganda, Lesotho, Mozambique and Ethiopia.
The debt/GDP ratio is projected to increase for all Fitch-rated SSA sovereigns other than the Seychelles in 2012-2017. But the magnitude of the increase varies. Currency depreciation and falls in nominal GDP due to lower commodity prices have also increased debt ratios in many cases, including that of Mozambique, where the metical has fallen sharply. Mozambique shows the largest increase in debt/GDP in 2012-2017 (60 percentage points), and Nigeria the smallest (3.7 percentage points). Most SSA sovereigns started from relatively low levels of debt after restructurings and debt forgiveness in the 2000s.
Rising debt has pushed up median general government interest expenditure as a proportion of revenues, from 4.8% in 2011 to 9.1% this year, and we project close to 10% next year. SSA sovereigns benefit from access to concessional lending (the median share of concessional debt in total external debt for Fitch-rated SSA credits excluding South Africa in 2014 was 62%). Only in Ghana, Nigeria and Zambia do interest costs exceed 15% of revenues, mainly as a result of high interest rates on domestic debt.
Rising debt servicing costs are an obstacle to fiscal consolidation among SSA sovereigns, and larger or unchanged deficits will lead to further increases in public debt, pushing debt ratios higher.
SSA remains one of the fastest growing regions in the world. However, while debt-funded infrastructure investment will help remove constraints on long-term growth, its benefits may not fully materialise until governance and business environments improve. As such, its near-term impact on sovereign debt ratios will be negative.
As well as rising debt, potential Fed tightening, dollar appreciation and volatile capital flows may lead to tighter financing conditions. Some capex budgets have been cut, but without revisions to overall expenditure frameworks for 2016 and 2017, debt ratios are unlikely to fall.
Fiscal risks in SSA are one of the factors reflected in the balance of sovereign rating outlooks. Six of the 18 SSA countries rated by Fitch are currently on a Negative Outlook, and there are no Positive Outlooks. Persistent fiscal deficits and growing external deficits could result in negative rating actions, especially where debt levels are already high and liquidity buffers moderate. ﻿

interest

Telkom CEO on H1 earnings & COVID-19 impact on business

The impact of COVID-19 lockdown on tax and unemployment related matters

Standard Bank extends instalment relief measures to personal account customers

Kenya’s budget paves way for Islamic finance

Fitch: Sub-Saharan Sovereign Debt Rises, Hampers Consolidation

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interest

Telkom CEO on H1 earnings & COVID-19 impact on business

The impact of COVID-19 lockdown on tax and unemployment related matters

Standard Bank extends instalment relief measures to personal account customers

Kenya’s budget paves way for Islamic finance

Fitch: Sub-Saharan Sovereign Debt Rises, Hampers Consolidation

News Tips

Advertise With Us

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