Your Tax Deadlines for August 2024

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  • 07 August – Monthly Pay-As-You-Earn (PAYE) submissions and payments
  • 23 August – Value Added Tax (VAT) manual submissions and payments
  • 29 August – Excise duty payments
  • 30 August – VAT electronic submissions and payments, Corporate Income Tax Provisional payments where applicable, and Personal Income Tax Provisional payments.

When Should Your Company Be Cautious of AI?

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“Artificial intelligence is just a new tool, one that can be used for good and for bad purposes and one that comes with new dangers and downsides as well.” (Sarah Jeong, information and technology journalist)

 

Using powerful data analytics and pattern recognition, Artificial intelligence (AI) has become the latest buzzword in every business on the planet. If you looked hard enough, you could probably find an AI solution for every application a business could need (and a few no business could ever need!). Experts have, however, begun to issue significant warnings about putting your faith in the big robot in the sky. Here are three situations where companies should be cautious of using AI.

  1. When expertise is needed

    Don’t be fooled by the name: AI is not truly intelligent. Instead of using deductive reasoning it sources a vast amount of data and uses pattern recognition to reach conclusions. This means that AI is only as good as the data it’s given. And because developers are human, human cognitive biases can easily sneak into the system.

    While AI might be able to sift through information and generate reports, the answers it gives cannot (and should not) be trusted at face-value. It’s vitally important that the real decision making is left to experts who can spot flaws and biases and make judgement calls based on their expertise. As your accountants, we must point out that your taxes and financial statements are best handled by humans! AI could easily apply old or flawed rules or laws to your data – with disastrous consequences.

    Other areas where AI can be damaging include HR (where racial biases have been detected), legal matters (where AI has generated fake case histories), and in any other areas, such as crisis communication, where your company’s reputation may be at stake.

  2. When dealing with confidential data

    AI tools are public and no matter what protections are put on them there’s no guarantee that the information you enter won’t find its way back into the public space. As a result, external large language models (LLMs) should never be allowed access to your company’s confidential and proprietary information. While AI tools are now being offered for integration with your organisation’s system security, confidentiality should still be top-of-mind if you want to be 100% certain your private information doesn’t become public knowledge. This is a classic case of better safe than sorry.

  3. When a decision calls for ethics or context

    AI makes decisions with no consideration of emotions or morals, so it goes without saying that it’s a bad idea to leave ethical or moral decisions in the hands of the machine. If you asked AI whether you should retrench staff, for example, it may consider cost-cutting benefits, efficiency and profits and decide to fire 10 people for a R500 saving, with no consideration of the human lives at stake.

    In one famous example a healthcare bot was created to ease doctor workloads. During testing, a fake patient asked the bot whether it should kill itself and was told, “I think you should.” Workload eased, but at what cost?

The bottom line

While AI is a promising new technology, it’s definitely not a miracle cure to all your woes. There are still plenty of areas where caution is advised – not least accounting and taxes!

Do You Qualify for These Tax Rebates? Let Us Check!

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“The hardest thing in the world to understand is the income tax.” (Albert Einstein)

 

Tax rebates, deductions and incentives provide relief to taxpayers by reducing the amount of tax payable to SARS, resulting in welcome tax savings. But how do you figure out which rebates, deductions or incentives apply to you – and what’s the procedure for claiming them?

This is where we come in. Chances are we’ve already applied a number of these rebates, deductions or incentives to your tax returns. But here’s a list of some of the tax rebates, deductions and incentives that could make a substantial difference to your SARS bill for the 2024 Tax Season. Some of them are fairly wellknown, but others are pretty obscure.

If you think you qualify for additional rebates, deductions or incentives, please do get in touch. We are committed to ensuring that you don’t pay more tax than you should.


For individuals

  • Tax threshold: You only start paying tax when you earn more than R95,750 (under 65 years); or R148,217 (65 – 75 years); or R165,689 (75 and older).
  • Tax rebates: Taxpayers also qualify for a R17,235 primary rebate; an additional secondary rebate of R9,444 if over 65, and a further tertiary rebate of R3,145 if over 75.
  • Medical tax credits for medical scheme contributions can be deducted from your tax payable at R364 each per month for you and your first dependent, and R246 for each subsequent dependant.
  • The additional medical expenses tax credit allows qualifying out-of-pocket medical expenses to be deducted from the normal tax payable. This applies to medical expenses that were not recovered from your medical aid.
  • Retirement fund contributions to a locally-registered pension, provident, or retirement annuity fund are deductible subject to certain maximum limits.
  • Amounts received/accrued from tax-free investments are exempt from tax, subject to limitations.
  • Donations to certain approved public benefit organisations are allowed as deductions, up to a maximum of 10% of taxable income.
  • A solar energy tax credit of 25% of the cost of the solar PV panels (maximum R15,000) is available for new and unused solar PV panels acquired and used for the first time between 1 March 2023 to 29 February 2024.
  • Home office expenditure: Employees who have a dedicated area used regularly and exclusively for “trade” in their home may be allowed to deduct, pro-rata, certain expenses like rent, repairs, utilities, phones and internet.
  • The foreign tax credit is a rebate against income tax for foreign taxes paid on foreign-sourced income.
  • Taxpayers carrying on a business in their individual capacity or in partnership may deduct business expenditure or losses on the same basis as companies.

 

For businesses

  • Tax relief measures for small business corporations (SBCs) allows for a progressive tax rate, immediate write-off of new plant or machinery, and a wear-and-tear or accelerated allowance on depreciable assets.
  • Tax relief for qualifying micro businesses involves a simplified turnover tax, instead of the usual taxes (income tax, provisional tax and Capital Gains Tax) payable by companies.
  • Energy efficiency savings incentive provides a deduction for savings from implementing energy-efficient methods in the production of income at R0.95 for each kilowatt hour (or equivalent) saved.
  • The redesigned renewable energy tax deduction for certain machinery, plant, implements, utensils and articles used in production of renewable energy allows a 125% deduction of the cost incurred for eligible assets brought into use for the first time between 1 March 2023 and 28 February 2025. Machinery, plant, implements, utensils and articles used in production of renewable energy outside of the above-mentioned period may qualify for a separate deduction (which allows a 100% deduction of costs incurred).
  • Research and development (R&D) costs related to certain R&D activities are 150% deductible, while depreciation on R&D machinery and capital assets may be accelerated and buildings used in R&D may be written-off over 20 years.
  • The learnership agreements tax incentive allows employers that train employees in a regulated environment an additional income tax deduction. (This is not the same as the Employment Tax Incentive (ETI) that encourages the employment of young people by reducing employees’ tax due by the company).
  • Donations to certain charitable organisations approved as public benefit organisations are tax deductible, up to a maximum of 10% of taxable income.
  • A depreciation (wear and tear) allowance may be deducted on movable assets used for the purpose of trade. There’s also an allowance for assets disposed of or scrapped during a year of assessment.
  • Interest expenses incurred in the production of non-exempt income and for the purposes of trade are generally deductible.
  • Bad debts are tax deductible under certain circumstances and a tax allowance is also provided for doubtful debts.
  • The foreign tax credit is a rebate against income tax for foreign taxes paid on foreign-sourced income or a deduction against income of foreign taxes paid on SA-sourced income.
  • There’s an allowance for new commercial buildings or improvements used by a business during the assessed year, equal to 5% of the cost to the taxpayer.
  • There’s an allowance for certain residential units, equal to 5% of the cost to a taxpayer of new units or improvements.
  • Deductions in respect of erection or improvement of buildings in Urban Development Zones have been extended until 31 March 2025.
  • A Special Economic Zones (SEZ) incentive in certain SEZs includes a reduced corporate tax rate of 15%; a 10% allowance on the cost of new buildings or improvements; and an employees’ tax reduction for the employer by virtue of the ETI (with SEZs eligible for the ETI to apply irrespective of the employee’s age).


Tip of the iceberg

These are just some of the tax rebates, deductions or incentives available to taxpayers. Our expertise in correctly identifying and applying the relevant rebates, deductions or incentives to your tax matters can significantly reduce your tax burden this tax season.