Adidas Originals and the Lego Group have collaborated yet again, and are presenting a new take on the classic Superstar silhouette. Launching alongside the playful Adidas Originals Lego Superstar sneaker is a buildable Superstar Lego brick model.
According to a recent survey, only 22% of South African businesses are aware of privacy laws governing their marketing activities, despite the Protection of Personal Information Act (PoPIA) set to take effect on 1 July 2021.
"As a young, Black female, I believe it's not only important to service clients but also to open up the digital floor to much needed conversations so that the campaigns we work on bring about real change," says Nombulelo Malinga, founder and director of Zizi Digital, which specialises in social media marketing and offers 360 digital consulting service.ByEvan-Lee Courie
Over the years your predecessors have consistently increased the pressure on high net worth individuals in their annual budgets. Currently the top 2% of earners account for between 25% and 35% of South Africa's total revenue.
Andrew Duvenage,managing director, NFB Private Wealth Management.
We understand government’s objectives to address the substantial disparities of equality in our society. However, we must reiterate the often-made comments that by over burdening the tax base there is the risk of disincentivising South Africans to earn income, or to earn it in South Africa.
Over burdening an already highly concentrated tax base comes with the risk of fiscal destabilisation. Therefore, here are our five top tips to you ahead of your maiden budget that we believe will contribute to the broader economic well-being of South Africa.
Reinvigorate tax incentives for corporate South Africa
Over the last few years, the primary generator of tax revenue has shifted from the corporate sector to the individual. This trend needs to be reversed. The solution is not to increase corporate tax rates, but rather to provide meaningful tax incentives to businesses that genuinely invest and grow the economy. Yes, there are almost 20 different investment incentive schemes currently targeting specific sectors or types of business activities but we’re calling for a broad-based growth incentive. We need tax incentives that unlock the cash on corporate balance sheets.
Similarly foreign companies should be incentivised to invest locally, whether building factories, investing in our globally regarded business process outsourcing sector, other services operations or mineral exploration.
The decrease in the corporate tax rate to a flat 28% in 2013 was a welcome reprieve for improved cash flow but has done little to encourage substantial investment of any form.
Let’s look at a radical drop in the corporate tax rate for a certain period of time. The caveat being that a substantial portion of corporate tax savings must be spent or real job creation or used for fixed capital expenditure. This way funds would flow back into more productive economic activity.
Create a more efficient public sector
Scale back on the government wage bill. Currently we spend 14% of our entire GDP on employees of the state - this is roughly 36% of our annual budget - and places South Africa second only to the UK in public sector salary spend, according to the World Bank.
Public servants at all levels need to be more efficient. Salary increases should be in line with inflation, similar to the majority of local businesses. The government wage bill should be less than 30% of the total budget without compromising the health and education sectors. The savings accrued in cutting back on the public sector salary bill should be used to fund entrepreneur support programmes and create employment in high-growth sectors.
Clarity on Regulation 28
The restrictions around asset allocation choices in retirement funds as outlined in Regulation 28 of the Pension Funds Act should be reconsidered, specifically the limits on offshore investing.
Your predecessor’s budget 2018 5% increase of offshore allocation to 30% was a move in the right direction. Please consider that a pre-retirement constraint on portfolios limits the probable performance over many years of saving. This needs reconsideration as it comes with serious unintended consequences on future financial security.
Learners must learn to save
Concurrent with a battling education system is a lack of financial education. Let’s redirect some of the education budget specifically to financial education. If we can educate school goers about things like budgets, retirement and goal orientated saving we would empower them with a foundation of understanding money which results in saving.
About the author
Andrew Duvenage is the managing director of NFB Private Wealth Management.
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