SAICA extends tax offering to public

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Johannesburg, Wednesday, 25 April 2012 – As tax legislation continues to be more complex and turbulent, the South African Institute of Chartered Accountants Saica has launched the Tax Suite, a tax knowledge-based platform aimed at keeping local practitioners, advisers and just about anyone that has anything to do with tax abreast of international and local best practice.Offered to both Saica members and non-members alike, the subscription-based web product is a comprehensive and broad tax resource offering on the South African market, backed by the countrys authoritative chartered accounting body.

“Chartered Accountants already have access to Saicas normal tax resources, but the Tax Suite goes beyond this. It provides a great opportunity for all participants in the tax space, not affiliated with the institute, to receive a range of services at CA-quality levels not yet seen in the marketplace,” explains Saicas Standards Senior Executive Muneer Hassan pictured.According to Hassan, no other tax resource on the market delivers the same value-add that the Tax Suite does. Not only is there value inherent in court case analyses, Tax Suite newsletters and journals, and in the business matching feature, but the Tax Suite is staffed by a uniquely qualified team.There are, according to SARS, more than 34,000 tax practitioners in South Africa. Hassan believes that the Tax Suite service will find wide appeal from both members who practice in tax, and from a much wider audience of tax practitioners. “We have already received positive feedback from the legal fraternity, and the broad tax advisory industry. There are competitive offerings,” says Hassan. “but none that have the depth of staff, or value that our Tax Suite provides. We are confident that this service will become South Africas premier tax reference site in a short space of time.”

via Moneywebtax – Saica extends tax offering to public – Integritax.

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Making jobs for people

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JOHANNESBURG, SOUTH AFRICA - JANUARY 21: In t...

“The real issue is not the target, the real issue is can we mobilise all of the South African resources… in order that all of us do what we can to put people into some kind of job,” Gordhan told the Foreign Correspondents Association in Johannesburg.

This included government, business and civil society.”We are not doing enough in South Africa as a whole,” he said.

The government had set the target of five million jobs by 2020, but Gordhan said it was more important to get everyone into some kind of job.

“In respect of our younger people, to have the basic experience of working, that is the objective at this point in time.”

Job creation was not the sole preserve of government, he said.

“You cant just look at government, because 70% of those jobs must come from the private sector.”

Its the private sector that must create jobs. For them to do this they must invest.”Gordhan said businesses had around R500 billion in profit surplus lying in banks, which they should be investing. Business, however, was risk averse, which he said was to some extent understandable.

Recent comments by First National Bank CEO Michael Jordaan were quite instructive, Gordhan said. Gordhan said Jordaan had said South African businesses needed to take a medium or long-term view, not just react to short-term risks.

“There are immense prospects that other countries are seeing on the African continent, that we ourselves are not seeing adequately,” Gordhan said.Business should also be taking advantage of opportunities offered by South Africas membership of BRICS – the Brazil, Russia, India, China, South Africa economic partnership.

Gordhan said there needed to be frank talk about what was holding up investment, especially as the economy was recovering.

“The globe is not going to collapse… after every crisis there is a recovery. We are in a period of recovery, just a very uncertain one… [its] not very smooth.”

When asked whether South Africas labour laws were restricting job creation, Gordhan said there were efficient structures in South Africa for raising these issues.

“Whichever side has concerns should use those forums and create a climate for dialogue… and resolution so that we can move ahead.”

He said international organisations had different views on whether South Africas labour legislation was rigid.

“And by and large the view would be that we are not an overly rigid economy.”

He said anyone with concerns about the proposed labour law amendments should approach Labour Minister Mildred Oliphant as she had an open door.

The Basic Conditions of Employment Amendment Bill and the Labour Relations Amendment Bill were adopted by Cabinet last month. They would now be considered by the Parliamentary portfolio committee on labour before being submitted to the National Assembly and the National Council of Provinces for adoption.

This was after over a year of debate on the two bills in the National Economic Development and Labour Council.

via All of South Africa needs to create jobs: Gordhan – Times LIVE.

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Mvelaserve to expand in Africa

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The Johannesburg Stock Exchange building.

Mvelaserve, which reported an 80 percent drop in net profit for the half year to December 2011, would be pursuing new business by expanding two subsidiaries into African countries over next six months according to Jorge Ferreira, Mvelaserve chief executive.Ferreira said on the sidelines of the group’s results presentation that Protea Coin Group which saw revenue jump 16 percent to R1.1 billion for the period under review and an increase of six percent in operating profit, would expand its security services to Ghana where three mining clients were setting up operations.

He said SA Water Services, a water treatment business which had made an operating loss of R1.5 million for the period and had a new management team, aimed to service all towns in Ghana.Ferreira said Mvelaserve aimed to expand into other markets in South Africa, “The returns are good [in Ghana]. We are still looking at the retail [environment] also.”

The group had also identified additional opportunities to sell security and cleaning services to new client American Towers for which Mvelaserve is providing maintenance of cellphone masts.

Mvelaserve, which was unbundled out of Mvelaphanda Holdings in 2010 and listed on the JSE in the same year, provides outsourced business support services that include food manufacture, cleaning and information and communications technology across Southern Africa.

Its clients span major sectors such as banking and healthcare and include Telkom, Shoprite and Transnet.

Ferreira said the group aimed to increase its contribution from business with government from “very low” to between 20 percent and 30 percent over the longer term.Investors who attended the results presentation at yesterday were however were not pleased with the company’s performance during the period under review.Although group revenue climbed 14 percent to R2.5 bn net profit for the six months declined to R17.2 million compared to R87.2 m for the same period last year due to poor performance of its cleaning subsidiary and reduced margins in Total Facilities Management Care TFMC.Profitability was also impacted by start-up costs for acquisitions made during the second half of last year.

In August last year it bought 51.6 percent of pothole repair firm Velocity Road Rehabilitation for R10m and in November acquired LTP Mast and Infrastructure Services for R14m.The company had restructured its cleaning and catering business during the period and secured contracts with mining company Kumba and SAB.

“It is difficult to grow this business in South Africa. It takes a year to negotiate contracts. Once they understand the concept I believe they can add value to the business,” Ferreira said.Mvelaserve fell 4.7 percent to R11.25 by 11.44 am, the largest drop since March 13 and trading at the lowest price since the beginning of the month.Investors demanded to know why trade payables had hiked 58 percent far more than revenue, why Royal Mnandi, a catering company was left to be a “problem child” for the past three reporting periods and why Mvelaserve had not realised sooner the accounting concerns that included double invoicing of clients and unprofitable contracts at Royal Mnandi.Ferreira said accountant at Rothschild was dismissed and debtors now reported weekly to Ernst Roth, Mvelaserve chief financial officer.

“It was just total negligence. I dont think it can be fraud,” he said. – Asha Speckman

via Mvelaserve to expand in Africa – Companies | IOL Business | IOL.co.za.

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SARS becomes stricter

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In this respect, SA falls in line with a world wide trend: the discernible flexing of muscle by tax administrations in a bid to generate extra revenue. For many countries this is a knock- on effect of the global financial crisis; for many African countries, enhancing domestic revenues is also crucial to reducing dependence on foreign assistance.Whatever the local imperative, the environment has never been riper for tax controversy in developed and emerging markets.The worry for companies is that aggressive clampdowns by a country’s revenue authority can lead to prolonged, burdensome wrangles that can ultimately render it inefficient for firms to continue doing business there .But an important policy shift is taking place, of which business, especially multinationals, should take heed: not only are tax administrations becoming more aggressive, they are becoming more effective. It emerges from a recent global survey by Ernst & Young that taxpayer data is being shared by tax administrations as never before , while multilateral tax enforcement efforts are growing.The Joint International Tax Shelter Information Centre is an example of this collective approach, as is the recent signing by SA and 12 other countries of the convention on mutual administrative assistance in tax matters.But perhaps the most chilling manifestation of this increased co-operation between tax administrations is the dawn of the joint audit investigation, which is a simultaneous examination of a multinational by the tax authorities in a number of jurisdictions .In the face of this phalanx of revenue scrutiny, it is perhaps of some comfort to be aware that tax administrations recognise that to be effective they need to co-operate with taxpayers and engage with them in dialogue.As the chairman of the African Tax Administration Forum Ataf, Oupa Magashula, said recently: “Experience has proven that there are distinct and tangible benefits for both revenue and business, as well as their advisers, to engage in more consultative and collaborative relationships.” While at present Ataf has no formal procedure to facilitate engagement with investors, Magashula has said he would welcome suggestions from business on a possible African engagement strategy.However, Ataf has also been vocal about the need to bed down measures to stem tax avoidance and evasion in the region, saying developing countries lose revenue through the siphoning of money to tax havens.The recognition by tax authorities that dialogue with taxpayers is integral to effective tax collection is encouraging. But for it to be meaningful, authorities should resist the temptation to paint all multinationals with the same brush. Just as emerging markets can differ considerably from one another and should not be regarded by investors as homogeneous, so it must be recognised that multinational companies often differ markedly from one another in approach, behaviour, policy and their philosophy on tax matters.Realistic communication between tax authorities and taxpayers should engender a more holistic appreciation of what multinationals are doing and lead to a less confrontational position being taken by all sides.In the meantime, routine information sharing between tax authorities, together with more sophisticated risk assessment and audit methodologies, mean that tax risk management needs to be securely embedded in companies’ approach to corporate governance .

via On my mind – Tax laws-Tax muscle-flexing.

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Can you claim VAT back on materials used for accommodation?

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We have workers who are collected on Monday mornings and dropped off in Bonnievale on Friday afternoons. As we are a working farm and 30Km away from Bonnievale we have to supply accommodation for the workers whilst they are at work. This is normal.We have built a new workers cottage, re-conditioned one cottage and built a flushing toilet, shower and wash-up area. Installed solar heating and lighting, and cooking facilities.We have claimed VAT on the materials used and Sars say that as we are not charging rental and paying VAT over to them we cannot claim the VAT back on materials.My husbands auditor in Durban said we are entitled to claim the VAT back and my accountants in Dbn say we are not allowed to?What is our position?Sars have said if I give them the Act that covers the VAT that can be claimed then they will accept that. So I have to do their work.Please could you help us on this?

Response by Muneer Hassan CASA, project director, Saica StandardsI had a look at section 12cii and agree that this is an exempt supply hence no input tax can be claimed on direct attribution method.

via Moneywebtax – Can you claim VAT back on materials used for accommodation? – Integritax.