The economic effects of the coronavirus crisis have been extensive in South Africa (SA) and a recovery to pre-pandemic levels will take several years. While it is forecast that the SA economy will recover marginally in 2021, it is likely to be uneven and subdued.
From a global perspective, the exceptionally accommodative policies in many advanced economies and improved economic outlooks have supported a partial recovery in global financial markets.
This has so far resulted in only a trickle of fresh capital flows to emerging markets, and financing conditions remain uncertain. This, together with the sharp rise in SA’s public financing needs, arising from falling tax revenue and higher spending, has been financed by higher private sector savings and borrowing from international financial institutions.
SA is subject to notable risks such as the slow vaccine roll-out, implying an almost inevitable third wave, which could potentially result in renewed restrictions on the economy. In addition, ongoing electricity supply issues, rising fuel prices, and the recent 15.6% increase in electricity tariffs, exacerbate the current situation. However, there are some potential positives on the horizon. Should the commodity cycle continue to power ahead, in-line with a stronger than expected global economic recovery, the SA mining and related sectors (e.g. manufacturing and transport) could outperform, boosting GDP via higher exports, adding to the fiscus, and hopefully also creating some job opportunities. As regards foreign direct investment (FDI) to SA, and according to data recently published in the UNCTAD’s 2020 World Investment Report (the Investment trends monitor of January 2021), FDI to SA almost halved in 2020 from 2019. However, large investment projects have been announced, including an investment by Google (US) of approximately USD 140 million and an additional investment of USD 360 million by PepsiCo. Amazon is also aiming at setting up headquarters in a R4 billion Cape Town development.
So its pretty much heads down and shoulders to the grindstone to see 2021 out with a medium view on growth and emerging from the ravaging effects of the pandemic. If you would like to have scenario planning for your business or investments, why not contact us for professional advice in this regard.
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.
It is compulsory for all public and private bodies (subject to some exclusions) who process personal information, to comply with the Act. This includes personal information about employees, customers, clients, and/or suppliers, collectively known as ‘data subjects’.
In certain other countries, SME’s are exempt from similar legislation, however in South Africa, this is not the case. It may be that in the future, SME’s will be exempted by the Information Regulator (IR).
The correct use of terminology for the Act is very important. The IR has requested that everyone uses ‘POPIA’ when referring to the Act, and the term ‘POPI’ is rather to be used when referring to the action or process of protecting personal information.
In order to comply with POPIA, public and private bodies or ‘organisations’ are required to implement a ‘POPI’ programme to ensure that the safety and privacy of the personal information for their ‘data subjects’ is protected.
Some important terms which are defined in the Act, and are vital to understand from the outset are:
“processing” this is defined very broadly in the Act, and means any activity (including automatic means) concerning personal information – and includes the collection, receipt, recording, organisation, collation, storage, updating or modification, retrieval, alteration, consultation or use, dissemination by means of transmission, distribution or making available in any other form or merging, linking, and restriction, degradation, erasure or destruction – of information
“personal information” is also defined very broadly in the Act, and includes a wide range of information that can be used to identify a data subject. It relates to information pertaining to an identifiable, living natural person, and where it is applicable, an identifiable existing juristic person, including (and not limited to) information relating to race, gender, marital status, pregnancy, ethnic or social origin, colour, sexual orientation, age, physical or mental health, well-being, disability, religion, conscience, belief, culture, language and birth. It also includes information relating to the education, or the medical, financial, employment or criminal history of the person, any identifying number, all contact details, biometric information, personal opinion, private or confidential correspondence of that person, the views or opinions of another individual about the person, and the name of the person
Grace and Implementation
All organisations have a grace period, and will be required to be fully compliant with POPIA within 12 months of the commencement date, in other words, by the 30 June 2021. The Act applies retrospectively, which means that these bodies will need to ensure that they have been compliant are from the commencement date (1 July 2020).
Information and Communication Technologies
ICTs, or Information and Communication Technologies (ICTs), have shown to be major contributors to the effectiveness of many different businesses throughout the world and are constantly changing the way people and industries operate. ICTs can be defined as an array of technologies that are designed to collect, store, process and communicate information both internally as well as externally of an organization. This makes ICTs quite a broad category of technologies but some of the most common examples are cloud computing, mobile apps, networked environments and even the Internet!
What are the benefits of adopting ICTs opposed to more traditional ways of working?
There are numerous benefits to adopting ICTs within businesses, some of the main ones being:
Reduction in operating costs
Increased level of productivity
Improved communication both internally and externally
Improved customer satisfaction
Increased opportunities through market exposure
Increased efficiency through better coordination within the value chain
Though there are numerous benefits to ICTs, adoption of these technologies does not automatically create value within your business as it must be implemented within direct support of your businesses processes. This will take time to properly implement as staff will generally require training and support during this process as well as the culture of the company may be technologically adverse, but the outcome can produce a competitive advantage within your respective industry. It is good to also note that ICTs is not a “once-off” implementation – it is a constantly evolving realm with new technologies being made available every year. To constantly reap the rewards of ICTs and maintain a competitive advantage, one must become aware of emerging technologies and assess whether benefit can be derived by adoption or not.
Filing Season 2021 Dates
Filing season starts on the 1st of July this year. The good news is that a significant number of individual taxpayers will be auto-assessed again this year, and this process will start in July.
SARS will send you an SMS if you are selected to be auto-assessed. SARS will auto-assess based on the data received from employers, financial institutions, medical schemes, retirement annuity fund administrators and other 3rd party data providers. If you accept your auto-assessment, any under or overpayment of tax will be processed as normal. If you want to edit your return, you can file your return on eFiling or the SARS MobiApp or alternatively contact us for professional assistance in this regards.
Filing Season 2021 dates:
1 July to 23 November 2021:
Taxpayers who file online
Taxpayers who cannot file online can do so at a SARS branch by appointment only
1 July to 28 January 2022: Provisional taxpayers including Trusts may file via eFiling or SARS MobiApp