Page 7 - KZN Business Sense - Vol4 No1 - eBook

TAX HIKES – A FOREGONE CONCLUSION?

Yasmeen Suliman, demands have continued tax revenue come from? individuals that earn more than the realms of possibility, but I
Director – Corporate increasing and debt service costs Given the inequality of wealth R3m per annum). It is doubtful, think that more stealthy tactics
Tax, KPMG Durban have ballooned, all of which distribution, an attractive however, that this proposal may well be employed to avoid
is exacerbated by sluggish tax proposal to populists would be would yield a significant an outcry from trade unions and
t is collections. the introduction of a wealth tax. amount in revenue – the 45% civil society groups.
with a I doubt, however, the readiness tax bracket was reintroduced in
Isense of There seems to be consensus of National Treasury and the 2017 but was estimated to yield Stealth taxes like fuel levies
nostalgia amongst commentators South African Revenue Service only R4,4bn, compared to the have in the past proven to be
that I that this year we would see (SARS) to introduce a new estimated R12.1bn yielded by an easy way to raise significant
thought some significant tax hikes – tax within a short period of not providing relief for bracket revenues quickly. The 2017
of the predictions vary from a 2% time. In my view, we may see creep. It is likely that this tactic Budget proposal to subject fuel
predictions VAT rate increase to a further the introduction of a wealth will be employed again this year to the standard VAT rate of
for the increase in tax rates for higher tax in the medium- to long- – individual taxpayers should 14% could be another way of
Budget paid individuals to an increase term, but not immediately. The not expect much relief from increasing significant amounts
a decade in the corporate tax rate to the consultation process to work inflation. of revenue quickly, without
ago. In 2008, tax commentators introduction of a wealth tax. out the finer points of how SARS having to invest in new
were speculating about which It seems to be inevitable that the tax would work is likely to By all accounts the budget systems.
taxpayers would benefit most taxpayers will have a higher be a long one (given there are shortfall is a significant Unfortunately this year, tax
from tax relief – in the end tax burden to bear post-Budget complexities in, for example, number, in excess of R50bn – so hikes seem to be a forgone
corporate taxpayers came out as 2018 – and it is the right year determining the tax base, the focussing on personal taxes will conclusion. 
the biggest winners with a 1% to introduce unpopular tax rate at which the tax should not yield sufficient revenue.
drop in the corporate tax rate proposals. The election is still be levied and anti-avoidance While increasing the corporate
followed by individual taxpayers a year away, enough time for measures) and SARS will need tax rates may well be an option Tel: +27 82 778 1031
with wider tax brackets and memories of the populace to to develop systems to be able to (but not likely given our yasmeen.suliman@kpmg.co.za
higher tax rebates. fade, and the optimism of a accommodate the new tax. desperate need for investment
No such predictions are to be political renewal may soften Another option would in the economy), indirect taxes
found for 2018. The reason is the complaints from the tax base. be the introduction of a would seem to be the best way
public purse is currently under higher marginal bracket for of filling the gap – the increase
severe strain – expenditure So where could the additional higher earners (say for those in the VAT rate is not beyond

PUTTING YOURSELF OUT THERE Mohamed Chohan is the Managing

Director at Startup Grind Durban
he January 2018 Startup This internal culture of putting on finding a market niche and
Grind Durban event people first is underpinned by aim for the business to be one of and the Founder of Actinium Digital
Tfeatured Mike Saunders, helping people to win in the the top five brands in that space. Consultancy as well as the Co-Founder of
not only a Durbanite, but the business arena. Clients have He commented that we learn by
founder and CEO of DigitLab - a included: Beiersdorf, The City pushing barriers and that failure Carbon Compliance.
digital marketing agency. Lodge Hotel Group, Huawei, is often the stepping stone that
KPMG, Growthpoint, The gets us to the success part. Startup Grind is a global startup community
Saunders, described as a serial Unlimited, Bidvest and Blue
entrepreneur and a celebrated Security. Therefore, there is no surprise designed to educate, inspire, and connect
business author, was previously that the first chapter of his book, entrepreneurs. Each monthly event, hosted
voted as one of the Top 20 people Apart from is marketing ‘The Five Year Mark’ looks at
to follow on Twitter in South services, the DigitLab Academy risk. The book is Saunders’ in over 200 cities and 100 countries, features
Africa. He says, “It is amazing provides training in digital skill collection of personal stories a successful local founder, innovator,
what you can do when someone sets to marketers and executives. and lessons, which aims to
believes in you.” Another platform is Digital encourage entrepreneurs on educator, or investor who shares their story
Swarm, which are events that their journeys. The Five Year
He explained that he has allow industry leaders to share Mark’s content includes vision, and the lessons they learned on the road to
always been driven by the desire their ideas and knowledge. leadership, operations, personal building a great company.
to give back to society and development, culture and
enjoys focusing his attention on Working in the social more. Saunders believes that
where he can have purpose. He marketing sphere, the big entrepreneurs are the solution to
strives to put something into question that people frequently many of the problems that South
the system and add value rather ask is, “If you have a business, Africa faces and that they need
than operating from a position how can you put yourself out support to get things done.
of gain, as he believes chasing there?” says Saunders.
money is not sufficient. However, he believes that
He says that research is key to Durban is entrepreneur friendly
Of his position as CEO, the solution. Any social media and that many successful
Saunders says that he is a big strategy should have meaningful entrepreneurs are every quiet
picture strategist, who has high-quality content and a and “not putting it out there”.
surrounded himself with a consistent presence, rather than “We want to hear their stories,”
creative team that can effectively tons of quantity. “We need to he added.
implement marketing campaigns create something attractive
via a range of services including enough with which people will Saunders stressed that we need
digital technology. want to engage.” to shift our view of life, as while
wealth and success is often an
Consequently, DigitLab, is not He added that building on end goal, having purpose is what
only an award-winning digital success is imperative, and that gives our lives significance and
marketing agency, but has built a one can never stop building. through which we can retire
culture where people feel valued Within this strategy, an element happily. 
and the strong work / family of bravery is required to stand
ethos has become a competitive out amongst other brands. An
advantage. effective strategy should focus www.startupgrind.co.za
Photograph: Mike Saunders

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