Kevin Lings is the Chief Economist of Stanlib. He is a well know economist in the financial services industry, has an approach that makes complicated economic matters easy to understand. Attached is his presentation on the economic outlook of South Africa. Click here to download presentation Source : Stanlib
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The SARS pocket tax guide has been developed to provide a synopsis of the most important tax, duty and levy related information for 2017/18.
Click here to download For any of your Tax or Vat queries please contact Su-Chin or Su-Lan, email finance@daberistic.com, tel 011 658 1333 . Source: SARS Discovery Vitality encouraged by the revised sugar tax design announced by Finance Minister Pravin Gordhan in his 2017 Budget Speech. In response to the proposed sugar tax, Dr Craig Nossel, Head of Vitality Wellness said: “We believe that action is required to reduce the intake of sugary drinks, and support the proposed sugar tax. From a health point of view, it is excellent news that sugar content will remain the base on which the tax is applied – this encourages reformulation and the availability of drinks with a lower sugar content. We are also pleased to hear that some of the revenue generated from the proposed tax will be used to support health-promotion programmes aimed at non-communicable diseases. We have much to do as South Africans to combat the increasing prevalence of obesity in our country, and the sugar tax is a step in the right direction.” There are a number of reasons Discovery Vitality supports the Government’s proposed introduction of a sugar tax. In South Africa, obesity is ranked as one of the top five risk factors for early death, and years lived with disabilities[i]. Excess sugar consumption is clearly linked to obesity[ii], which is the number one risk factor for chronic diseases of lifestyle, also known as non-communicable diseases (NCDs), like diabetes and heart disease. It is estimated that NCD-related deaths globally will outnumber deaths from communicable, maternal, and perinatal deaths by 2030. South Africans are among the top 10 consumers of sugary drinks in the world[iii]. Studies also show that we continue to increase our consumption of sugary drinks: A study on Food consumption changes in South Africa since 1994’[iv] shows that the total intake of sugary drinks – carbonated and fruit juice – increased by 68.9% between 1999 and 2012. Research shows that drinking too many sugary beverages leads to an increased risk for obesity, particularly concerning for children and adolescents. This is because sugary drinks are a significant source of added sugar but do not make you full. Generally, people do not eat less to compensate for the extra calories they drink[v]. Obesity is rising Between 1980 and 2008, the prevalence of obesity worldwide doubled. With almost 40% of women and 11% of men classified as obese[vi], South Africa has the highest obesity rate in Sub-Saharan Africa. Rising obesity rates, which evidence demonstrates is the key cause of the pandemic of NCDs, are mainly caused by changes in our diet, work and leisure time. Specific drivers include energy-dense, nutrient-poor diets, physical inactivity, large portion sizes and irresponsible food advertising. Obese individuals incur 30% higher medical costs than their counterparts with a healthy weight Research published in the South African Medical Journal on the relationship between levels of obesity and medical expenses[vii] among South Africans on a medical scheme show that obesity is strongly associated with significantly increased healthcare expenditure. Severe obesity, this study indicated, increased healthcare expenditure by R4 425 for each person, split between inpatient and outpatient care. Recent Discovery Vitality research gathered from HealthyFood Benefit data, which specifically looked at the impact of sugar purchasing (specifically from sugary drinks) on healthcare costs, supports the findings of the medical scheme study. The analysis showed that an increase in sugar purchasing (from sugary drinks) was associated with a 4.1% increase in healthcare costs over a 3-year period from 2014 to 2016. The research also showed that members who started off consuming a greater amount of sugar had healthcare costs that were 2.9% higher than for the rest of the members by the end of the period. Cooperative efforts are needed to ensure policy changes are effective A multi-pronged approach is required to achieve a change in population behaviour and health. Discovery Vitality has gathered a significant amount of scientific and anecdotal evidence over the last twenty years, which points to the successful application of behavioural economics, and the power of education and wellness intervention programmes. The HealthyFood Benefit, which offers members up to 25% cash back on a range of healthy foods (specifically selected to address high risk dietary practices that are associated with NCDs including diabetes, high blood pressure and high cholesterol), is one such example. Over time, Discovery Vitality has found that incentivising members to make healthier choices positively influences their purchasing behaviour; an increase in the purchasing of fruit, vegetables, and whole-grain foods, and a reduction in the purchasing of high-sugar, high-salt, processed, and fried foods[ Apply for your Vitality or the Healthy food benefit on Vitality contact Namhla in our Health, email health@daberistic.com, tel (011)658-1333 Source: Discovery With this year’s National Budget, as announced by Minister Pravin Gordhan on Wednesday 22 February 2017, the following fast facts as it relates to the healthcare industry are highlighted for your attention
Source: Resomed INCOME TAX Individuals and special trusts A new top bracket has been introduced for personal income tax - individuals’ taxable income above R1.5 million per year will be taxed at 45%. Previously, the top bracket of 41% was set at R701 301. The new top marginal income tax bracket is accompanied by partial relief for bracket creep 1. The personal income tax rates for the 2017/2018 tax year are listed below. Companies and trusts
TAX RATE The income tax rate for companies has remained unchanged at 28%, while the income tax rate for trusts (other than special trusts) has increased to 45%. TAX THRESHOLDS Tax thresholds have increased to: R75 750 for taxpayers younger than 65 R117 300 for taxpayers aged 65 to below 75 R131 150 for taxpayers aged 75 and older REBATES The primary rebate (deductible from tax payable) has increased to R13 635 per year for all individuals. The secondary and tertiary rebates have increased to: R7 479 for taxpayers aged 65 and older R2 493 for taxpayers aged 75 and older INTEREST EXEMPTIONS Interest exemptions have remained unchanged at: R23 800 per annum for individuals younger than 65 years R34 500 per annum for individuals 65 years and older MEDICAL TAX CREDITS Monthly tax credits for medical scheme contributions will increase from: 1.R286 to R303 per month for the person who pays the contributions and the first dependant on the medical scheme 2.R192 to R204 per month for each additional dependant Bracket creep occurs when the income tax tables are not fully adjusted for inflation, and inflationary salary adjustments increase an individuals’ effective tax rate, reducing real income. As the increases to taxable income brackets, the tax thresholds, and the rebates are below the expected level of inflation, taxpayers will face a real increase in their effective personal income tax rate in 2017/2018. INTEREST WITHHOLDING TAX (IWT) AND DIVIDEND WITHHOLDING TAX (DWT) Interest Withholding Tax (IWT) on interest from a South African source payable to non-residents has remained unchanged at 15%. Interest is exempt if payable by any sphere of the South African government, a bank or if the debt is listed on a recognised exchange. Dividend Withholding Tax (DWT) on dividends paid by resident companies and by non-resident companies for shares listed on the JSE has increased from 15% to 20%, effective 22 February 2017. The exemption and rates for inbound foreign dividends have also been adjusted in line with the new local DWT rate, resulting in a maximum effective rate of 20%. TAX-FREE SAVINGS ACCOUNTS The annual limit on contributions to tax-free savings accounts has increased from R30 000 to R33 000. RETIREMENT LUMP SUM TAXATION At retirement: The retirement lump sum tax table is unchanged. The table below illustrates how retirement lump sums will be taxed. Click to read more If you have any queries on your personal or business tax, contact our Finance Department, email finance@daberistic.com, tel (011)658-1333 Source: Allan Gray Budget 2017 was unusual due to the tough economic environment in 2016 and SA narrowly having avoided going into recession, according to independent economist Sandra Gordon. She was the guest speaker at the monthly networking forum of the Western Cape Business Opportunities Forum (WECBOF) on Wednesday evening. "The slow SA economy has led to little revenue, which put a squeeze on Treasury. Ratings agencies are concerned that SA is building up debt so quickly and the country sits right on the line between being investment grade or junk," said Gordon. "If SA is downgraded to junk status it will raise the cost of borrowing. It can take up to seven years to get out of junk status. Budget 2017 was, therefore, so tight and constrained that the consensus is that SA won't be downgraded in the first half of 2017." Treasury has indicated that the path SA is on at the moment is not sustainable. That leaves the question of how economic transformation could be achieved. "Budget 2017 was more of a political vision. Resources are so limited that there is not much government can do for SMEs until the economy gets better," said Gordon. "That is why I think it is not worth waiting for government to do something for SMEs." At the same time, she said there is an improved economic outlook for 2017. This could mean that interest rates are cut later this year or early next year. "Entrepreneurs should be aware of how things are changing," concluded Gordon. Written by : Carin Smith Source: Fin24 “In these tough times we draw strength from the resilience and diverse capabilities of our people, our business sector, our unions and our social formations.”Pravin Gordhan, Budget Speech 22 February 2017 Personal tax
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