Annual Inflation Continues to Fall
A recent report from STATSA states that annual inflation eased further in November, falling to 3,6% from October’s 3,7%. This is the third successive month of disinflation, which means that the pace of price increases is slowing down.
November’s reading is the lowest since December 2010 when the rate was 3,5%. The highest rate recorded since December 2010 was 7,0% in February 2016. Since the end of 2016 inflation has been on a downward trend and has remained firmly within the South African Reserve Bank’s 3%–6% monetary policy range since April 2017.
Housing and utilities, miscellaneous goods and services, and food and non-alcoholic beverages were the biggest contributors to the 3,6% increase in November 2019.
Food and non-alcoholic beverages’ inflation was 3,5%, slightly lower than the 3,6% recorded in October. Bread and cereal prices continue to climb, however, recording an annual rate of 8,0%. Fish prices increased by 7,6% and meat was on average 1,8% more expensive than it was a year ago.
If you are a wine drinker, you would have paid 8,7% more for a bottle in November than you would have in the same month last year. Beer prices have risen by 2,8% over the same period.
The transport category moved into deflationary territory in November, showing an average annual price decrease of 0,3%. Annual deflation means that overall prices were lower in November than they were in the same month last year. A drop in the price of inland 95-octane petrol by 13c per litre between October and November contributed to this decrease, bringing the annual decline for the year to R1. The last time the transport category was in annual deflation was October 2015, when the price of 95-octane petrol dropped by R1 over a
Managing your Tax Compliance Status with SARS
4 November 2019 – The issuing of the printed Tax Clearance Certificate (TCC) was stopped from 2 November 2019. All TCCs currently in circulation will be cancelled. The TCS PIN enables you to authorise any third party (an organisation or government) to view your status online via eFiling. It will present your overall tax compliance status at the date and time of viewing it. To protect taxpayer confidentiality, no other info will be accessible to a third party.
What is it?
In a continued effort to improve compliance and to make it even easier for taxpayers to manage their tax affairs, the South African Revenue Service (SARS) has introduced an enhanced Tax Compliance Status System.
The TCS system is available for the following applications:
- Good standing
- Foreign Investment Allowance
To apply for your TCS, you can access the TCS system by selecting the TAX STATUS menu option on eFiling or by visiting your nearest SARS branch.
What do I need to do?
With this in mind, in order to be tax compliant, you should make sure that:
- You do not have any outstanding tax returns
- You do not owe any money to SARS unless a payment arrangement or suspension of debt has been agreed to
- You are registered for all the tax products that you are liable for
- Your registered particulars are updated
- You have either merged (via the Merge tool on eFiling) or declared (on the ERC01 form available as part of the TCS process on eFiling), all your registered tax reference numbers.
Should have any queries or require professional advice in this regard do not hesitate to contact us.
Gazetting of the Carbon Offsets Regulations in Terms of the Carbon Tax Act and Related Draft Regulations for Public
The Carbon Tax Act (Act No. 15 of 2019) was signed into law by the President in May 2019 and came into effect from 1 June 2019. In terms of section 19(c) of the Carbon Tax Act, the Carbon Offsets Regulation was gazetted on Friday 29 November 2019 (Gazette No. 42873) and is available on the National Treasury website.
For the next 3 years – The National Treasury has published, for public comment, two further sets of regulations, namely Draft Regulations for the Trade Exposure Allowance for purposes of section 10 and Draft Regulations for the Greenhouse Gas (GHG) Emissions Intensity Benchmarks for purposes of section 11 in terms of section 19(b) and (a) of the Act, respectively.
This follows on an extensive stakeholder consultation process on the design of the carbon tax and tax-free allowances since the publication of the Carbon Tax Policy Paper in 2013 and the 2015 version of the Carbon Tax bill. The National Treasury will ensure that the final regulations are gazetted by the first quarter of 2020 to be aligned with the greenhouse emissions reporting period of the Department of Environment, Forestry and Fisheries.
The carbon tax is an integral part of Government’s package of policy measures to mitigate climate change as outlined in the National Climate Change Response Policy, National Development Plan and its Nationally Determined Contribution commitments under the 2015 Paris Agreement. It provides for the introduction of the carbon tax in a phased manner at a relatively low rate initially to allow businesses time to make the necessary structural adjustments to their production processes and practices and to ensure a just transition to a low carbon, climate resilient economy.
To ensure a cost effective transition, the design of the tax provides for the recycling of revenues through the electricity generation levy credit and energy efficiency savings tax incentive, and significant tax free-allowances of up to 95 per cent of the total greenhouse gas emissions to firms, consisting of a basic tax free allowance of 60 per cent for direct, scope 1 emissions and allowances for sectors that are trade exposed up to a maximum of 10 per cent and a performance allowance up to a maximum of 5 per cent. The trade exposure allowance aims to assist companies that potentially face competitiveness pressures whilst the performance allowance seeks to encourage firms to reduce the carbon intensity of their production processes relative to their peers and promote the competitiveness of local products.
The Draft Regulations and a detailed summary of the regulations are available on the National Treasury website. Written comments on the 2019 Draft Regulations must be submitted to email@example.com by close of business on 17 January 2020.
2020 – Make or Break for South Africa?
South Africa is a resilient country. It has survived internal strife and looked into deep and dark abysses in the past yet has always come out on top – or at least with positive intent to rebuild on the foundations of our society. But it has been a long time since such negativity has prevailed with the ongoing saga of state capture and failure after failure of State-Owned Entities.
Minister Mboweni’s Medium Term Budget Policy Speech did little to appease international ratings agencies. This year’s Budget speech in February is pretty much our last chance to take the necessary corrective action to set the path for rebuilding South Africa as an all-inclusive society with economic opportunities for all.
While we wait for government to act, we need to revisit our strategy for 2020 and beyond to ensure that we can survive the tough road ahead. So, while on your annual festive holidays, give thought to how you can overcome hurdles and help rebuild our economy going forward.