News

Managing risk and building resilience in an unpredictable world

Resilience may be the new corporate buzzword, but even small and medium-sized businesses can put systems in place that help them to bounce back faster from setbacks. In a world where uncertainty is the new normal and disruption is a constant threat, the best way to manage risk is to build resilience into your business – and it’s much easier than you think.

Agriculture in Africa Is Set to Become More Prominent

Agriculture in Africa is set to become more prominent, helped by a growing population and the recent signing of the African Continental Free Trade Area agreement. In the second of our two-part series on agriculture, Kim Cloete speaks to Fanus Truter, a Moore Stephens director in the Southern Cape, about prospects for farmers, boosting exports and shifting gear to keep up with new technology.

Property Developers Temporarily Letting out Residential Fixed Property

Property developers who let out residential units have been dealt a blow, as relief provided for in the VAT Act has come to an end.
 
In terms of current legislation where a VAT vendor acquires assets for the purpose of making taxable supplies and this application changes, whether it be a periodic or permanent change, they are required to make a change of use adjustment and effectively repay to SARS the input tax they would have previously claimed.

Spotlight on Transfer Pricing, Says Finance Minister

It was indeed a relief that we had a budget speech as scheduled and without major disruptions. Although not being the main focus point of the post budget media discussions (the increased VAT rate won that prize), there is a strong emphasis in the budget proposals on increased enforcement of rules and regulations governing transfer pricing and cross border transactions, that may result in profit shifting.

Twin Peaks: A New Regulatory Era

The Financial Sector Regulation Act (FSR Act) was signed into law by the President on 21 August 2017. The Act aims to consolidate the regulation and supervision of the financial sector and its various subsectors - namely banking, insurance, financial products and services and market infrastructure - to ensure that each subsector is subject to financial regulation. This regulation requires financial firms to control risks and hold adequate capital as defined by capital requirements (Prudaential requirements) and consumer protection rules in the form of market conduct supervision.
 

Economic and Market Overview

Global

2017 turned out to be a buoyant year on the global economic front. Leading indicators in most developed economies were trending up and talk about a synchronised global recovery has been widespread. This was evident in capital market performance over the last twelve months.
 
The manufacturing PMI lead indicators have been particularly strong towards the end of 2017: the ISM indicator in the US rose to its highest level since 2004, the Chinese official PMI is the highest since 2012, and the European composite is its highest since 2011.

The Outlook for Agriculture in 2018

The South African agricultural sector has gone through a turbulent time over the past year, with many farmers facing a battle of survival in drought-stricken areas.  In the first of a two-part series, Kim Cloete speaks to Jo Viviers, a partner in the Moore Stephens Humansdorp office, about prospects for the industry and how Moore Stephens is helping to advise farmers.

Five Money Resolutions for a More Financially Secure 2018

There is no question that we are living in uncertain economic times, but that doesn’t mean that you can’t feel financially secure. For most people, financial security means having a reliable source of income, but there are other ways to ensure that, even during tough times, you won’t feel the crunch. We recommend committing to these five resolutions to ensure that in 2018 your financial well-being is in the best shape possible.

National Treasury Softens Stance on Tax Exemption for Foreign Employment Income

National Treasury has confirmed that the tax exemption for foreign employment income, as contained in section 10(1)(o)(ii) of the Income Tax Act, will be amended to allow for the first R1 million of foreign remuneration per year to be exempt from tax in South Africa if the individual is outside of South Africa, for a certain period of time.

This is a welcome change from Treasury’s previous stance on the matter, which proposed a complete repeal of the exemption, with foreign remuneration consequently fully taxable in South Africa.

Economic and Market Overview

Global

Real global economic growth has tilted up and is approaching the long-term trend of 3.5% per annum, and yet global interest rates remain at depressed levels. At 1.25%, the Federal Reserve’s Fed funds rate is high when measured against its peers (Bank of England’s clearing bank rate at 0.25% and the European Central Bank’s repo rate effectively at 0%). Yet it is by no stretch of the imagination high when measured against historical levels. 

Monetary policymakers, especially outside of the US, are particularly dovish and very careful not to stifle economies with near-term interest rate increases. There are, however, pockets of strong growth around the world – the aggregate real GDP growth of emerging markets averages nearly 5% at the moment. Sadly, South Africa is the worst performing of these markets at around 0.5%.

Self-Insurance: Manage Risk While Optimising and Sustaining Your Company’s Growth

Did you know that alien abduction insurance has been available in the USA since 1987? Today, it would be unusual to find someone who has not purchased some form of insurance, whether it be for his/her car, home, life or business. Insurance gives us the financial security against unforeseen, calamitous and sometimes tragic events, with insurers providing policies for these risks, and many, many others.

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