Budget 2023: Your Tax Tables and Tax Calculator

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The big Budget Speech 2023 tax news was the introduction of tax incentives for investing in rooftop solar and renewable energy. The Budget also detailed tax relief in the form of adjusted tables for tax and rebates for individual taxpayers, adjusted tables for retirement tax and transfer duty, and the expected increases in ‘sin’ taxes. How will these changes affect you directly?

To better understand the impact of the Budget on you and your business, here is a selection of official SARS Tax Tables, then follow the link to Fin 24’s Budget Calculator to do your own calculation.

Businesses – corporate tax rates unchanged*

Source: SARS’ Budget Tax Guide 2023

Individual taxpayers – tax tables adjusted

Source: SARS

 

Source: SARS

 

Source: SARS

 

Transfer duty table – adjusted 

Source: Budget 2023 People’s Guide

 

Sin taxes raised

Source: Budget 2023 People’s Guide

 

How much will you be paying in income, petrol and sin taxes?

Use Fin 24’s four-step Budget Calculator here to find out the monthly and annual impact on your  income tax, as well as what you will pay in future in terms of fuel and sin taxes, bearing in mind that the best way to fully understand the impact of the announcements in Budget 2023 on your own and your business affairs is to reach out for professional advice from your accountant.

Budget 2023: How It Affects You and Your Business

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“This is not an austerity budget. It is a budget that makes tough trade-offs in the interests of the country’s short and long term prosperity.” (Finance Minister Enoch Godongwana – Budget 2023

Finance Minister Enoch Godongwana’s second Budget contained no major tax proposals, thanks to an improvement in revenue from higher collection in corporate and personal income taxes, and in customs duties.

Instead, the focus of Budget 2023 was firmly on the current energy crisis, which has resulted in a State of Disaster being declared. It announced that government will take over R254 billion of Eskom’s debt over the next two years, subject to stringent conditions.

Of the tax relief amounting to R13 billion to be provided to taxpayers in 2023/24 announced in the Budget, R9 billion is earmarked to encourage households and businesses to invest in renewable energy. More specifically, R4 billion in relief is provided for households that install solar panels and R5 billion to companies through the expansion of the existing renewable energy incentive.

These incentives are briefly detailed below, along with some of the other announcements that will impact individuals and businesses.

Budget announcements that will impact you personally

  • A new tax incentive to install rooftop solar panels: For one year from 1 March 2023, individuals will be able to claim a rebate of 25% of the cost of installing rooftop solar panels, up to a maximum of R15,000, to reduce their tax liability in the 2023/24 tax year.
  • The personal income tax brackets will be fully adjusted for inflation, increasing the tax-free threshold from R91,250 to R95,750.
  • Medical tax credits per month will be increased by inflation to R364 for the first two members, and to R246 for additional members.
  • The retirement tax tables for lump sums withdrawn before retirement and at retirement, will be adjusted upwards by 10%, increasing the tax-free amount at retirement to R550,000.
  • Revised draft legislation on the ‘two-pot’ retirement system will be published, including the amount immediately available at implementation from 1 March 2024. Withdrawals from the accessible “savings pot” would be taxed as income in the year of withdrawal.
  • Social grants will increase in line with CPI inflation. The R350 grant will continue until 31 March 2024.
  • Increases in the excise duties on alcohol and tobacco of 4.9%, in line with expected inflation. This means that the duty on:
  • a 340ml can of beer increases by 10c,
  • a 750ml bottle of wine goes up by 18c,
  • a 750ml bottle of spirits will increase by R3.90,
  • a 23g cigar goes up by R5.47,
  • a pack of 20 cigarettes, rises by 98c.


Budget announcements that will impact your business

  • Expanding the existing section 12B tax allowance for renewable energy, businesses will now be allowed to reduce their taxable income by 125% of the cost of an investment in renewables for two years from 1 March 2023. There will be no thresholds on the size of the projects that qualify. According to National Treasury, where a renewable energy investment of R1 million is made by a business, that business will qualify for a deduction of R1,25 million, which could reduce the corporate income tax liability of a company by R337,500 in the first year of operation.
  • The existing Bounce Back Loan Guarantee Scheme will be updated to become the Energy Bounce Back Scheme, to be launched in April 2023. Government will guarantee solar-related loans for small and medium enterprises on a 20% first-loss basis.
  • The research and development tax incentive will be extended for 10 years and will be refined to make it simpler and more effective.
  • The urban development zone tax incentive will also be extended, by two years.
  • Manufacturers of foodstuffs will for two years (from 1 April 2023) also qualify for the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, to ease the impact of the electricity crisis on food prices.

Budget announcements that will impact all

  • Providing tax relief of R4 billion, the general fuel levy and the Road Accident Fund levy will not be increased this year. However, the carbon fuel levy will increase by 1c to 10c/l for petrol and 11c/l for diesel from 5 April 2023.
  • The health promotion (sugar) levy will remain unchanged for the following two fiscal years.
  • The brackets of the transfer duty table will also be increased by 10%, allowing properties below R1.1 million to avoid any transfer duty payments.

How best to manage these changes and their impact?

In addition to the announcements detailed above, there were other technical amendments proposed in the Budget review that will require professional advice.

As tax collection remains government’s main source of income, you and your business would do well to rely on the expertise and advice of tax professionals as you determine the impact of the Budget 2023 announcements on your tax affairs.

 

Effective 1 March 2023: New Earnings Threshold and National Minimum Wage

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Employers and employees need to keep an eye on the annual increases in both the National Minimum Wage and the Earnings Threshold, summarised below for your convenience. Both are effective from 1 March 2023.


The National Minimum Wage increase

The National Minimum Wage (NMW) for each “ordinary hour worked” has been increased by 9.6% from R23-19 to R25-42. Workers who have concluded learnership agreements in terms of the Skills Development Act are entitled to a sliding scale of allowances.


Domestic workers

Domestic workers were brought into line with the NMW in 2022, and assuming a work month of 21 days x 8 hours per day, R25-42 per hour equates to R4,270-56 per month. The Living Wage calculator will help you check whether or not you are actually paying your domestic worker enough to cover a household’s “minimal need” (adjust the “Assumptions” in the calculator to ensure that the figures used are up to date).


The Earnings Threshold Increase

The annual earnings threshold above which employees lose some of the protections of the Basic Conditions of Employment Act has been increased by 7.6% from R224,080-48 p.a. (R18,673-87 p.m.) to R241,110-59 p.a. (R20,092-55 p.m.).

“Earnings” (for this purpose only) means “the regular annual remuneration before deductions, i.e. income tax, pension, medical and similar payments but excluding similar payments (contributions) made by the employer in respect of the employee: Provided that subsistence and transport allowances received, achievement awards and payments for overtime worked shall not be regarded as remuneration”.

Some employees enjoy only limited BCEA protection even if they earn below the threshold – notably any “senior managerial employee” (“an employee who has the authority to hire, discipline and dismiss employees and to represent the employer internally and externally”), any “sales staff who travel to the premises of customers and who regulate their own hours of work” and any “employees who work less than 24 hours a month for an employer”. Take specific advice for details.

The threshold also impacts on some of the protections provided in the Labour Relations Act –

  • Employees earning less than the threshold, if contracted to a client for more than three months through a temporary employment service (“labour broker”) are deemed to be employed by the client unless they are actually performing a temporary service.
  • Fixed-term employees earning below the threshold are deemed to be employed indefinitely after three months unless the employer has a justifiable reason for fixing the term of the contract.

Turning to the Employment Equity Act, employees earning over the threshold can only refer unfair discrimination disputes (other than disputes based on sexual harassment) to the Commission for Conciliation, Mediation and Arbitration (CCMA) with the consent of all parties. Otherwise, they must go to the Labour Court for arbitration.

How To Prepare a Reliable Disaster Recovery Plan

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“The time to prepare for disasters is before they happen” (Stephen Matheson, Vice President of Product at BridgeHead)

Given how reliant we all are on our IT infrastructure, it will come as no surprise to learn that one of the worst things that can happen to a business is for a failure to occur in that department. Whether it’s fire, floods, or hacking, being taken offline can spell a serious period of trouble for most organisations. In the time it takes to get back up and operational projects can be delayed, the quality of work can suffer, or worst of all, everything is put on hold for months while data is recreated. All of this can lead to strained relationships with both customers and suppliers and potentially the end of the business.

A Disaster Recovery Plan is the pre-planned process a company will turn to when disaster strikes to ensure that a short-term problem does not become a permanent one.

Here are five simple tips for what you need to consider when drawing one up.

  • Have a response checklistThe response checklist is a detailed breakdown of which employees should be contacted and what they should do in the event of a disaster. These should cover everything from who phones your IT support company to who puts out the fire or organises the evacuation drill. Ideally, these responses should be practiced. It’s no good telling someone they have to turn off the building’s water in the event of a flood if they don’t know where to do that.
  • Have a data backup planAll company data needs to be backed up, as regularly as possible. How this is done will depend on how vital that data is to the operational capabilities of your business but should happen at least once a day. Look at your company carefully and decide which information is vital and which can safely be lost. You don’t need to back up all your client emails if you also keep other records of their projects for instance.Data is a business asset and has real value. The more important the data, the more strictly and safely that data needs to be backed up. Can you do it yourself on a hard disk that the secretary takes home, or do you need a full-scale external, cloud-based solution?
  • How are you going to tell your clients?While it’s usually a good idea to keep drama and difficulties far away from your clients, in this instance it may be important to tell them what is going on to explain any delays they may be about to experience and how you are planning to meet their orders.  In addition, provide them with any alternate contact details.Your plan should detail exactly how that is going to happen. Having pre setup and approved email addresses and telephone numbers organised will save a lot of time and frustration until your company is back on its feet.
  • Cost considerationsYour plan should also take into account the cost considerations of setting things up anew. Will you need to buy new servers? Do you need to bring in IT experts to recover data? The money for this should be set aside and available as every day you delay your recovery is another step closer to bankruptcy.Speak with your accountant as to how you can finance this fund, or whether insurance options may be a financially viable option for your company.
  • Vital document and data storage

On top of all of this, your Disaster Recovery Plan should also detail where copies of all the most vital information will be stored and how they can be retrieved. This should be a safe and secure offsite location. Keys and access codes need to be kept in a third location as well.

Five Essential Bookkeeping Tips for Small Businesses

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“Making good judgements when one has complete data, facts, and knowledge is not leadership – it’s bookkeeping” (Dee Hock, Founder and CEO of VISA)

When running a small business, it often feels like you are doing everything yourself, and some important tasks can slip under the radar. One aspect that should never be forgotten though is bookkeeping. While intimidating, keeping your finances in order need not be as hard as it sounds. Here are our tips for ensuring your accounts remain ordered and your peace of mind intact.

  1. Ask your accountantIf you want to keep things as simple as possible and guarantee you never run foul of the law, getting your accountant in to do your bookkeeping is the safest and most efficient way to do your books. Apart from being able to manage your finances, an accountant would be able to help save on taxes and advise you on areas of the business that may be streamlined.
  2. Keep your personal and business accounts separateIt may not seem like much, but mixing up which account pays for what can lead to hundreds of extra hours of work over the course of a year working out which deductions and expenses relate to your business. Rather keep personal and business accounts and banking separate.
  3. Set up reminders for important deadlinesUsing an online calendar, it’s now easy to set up reminders for all those important tax and other deadline dates so you know when things are becoming urgent.
  4. Keep receiptsBe sure to keep all receipts to build a verifiable audit trail. Whenever you pay anything out to a supplier it’s important to get an invoice and file it away. Keep all your receipts for all business expenses and purchases. You never know when you may be hit with an audit and need to prove everything you have said.
  5. Keep reports

    Every month generate a one-page document detailing all your income and expenditure. Ask your accountant to set up a simple monthly one-page report that, in addition, compares actual income and expenses to your budget. It doesn’t have to be detailed but should give you an idea of just where the money is going and what is coming in. As well as making bookkeeping easier, it will also help you track the growth and health of your company.

Budget Speech 2023 | How it affects you and your business

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The 2023 budget speech delivered by Finance Minister Enoch Godongwana brought a fair amount of good news for South Africans.

There will be support for households and businesses installing renewable energy, no income tax increases were announced, and the fuel levy remains unchanged, taking some pressure off people’s budgets.

However, the Minister could not avoid acknowledging that the problems at Eskom are a big challenge to the country’s growth prospects.

“The lack of reliable electricity supply is the biggest economic constraint,” Godongwana said.

He therefore announced that government would be taking over a big portion of Eskom’s debt to take some pressure off the utility, and that a number of steps were being taken to restructure the local electricity industry.

“Establishing a competitive electricity market will enable South Africa to ensure a stable, uninterrupted power supply as it transitions to a clean energy future,” National Treasury stated in its budget review.
Click here to view SAICA’s Budget Analysis and Commentary with Tax Guide
View FAQs on Solar Tax Incentive

Your Tax Deadlines for February 2023

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  • 7 February – Monthly Pay-As-You-Earn (PAYE) submissions and payments
  • 27 February – Excise Duty payments
  • 28 February – Value-Added Tax (VAT) electronic submissions and payments & CIT Provisional payments where applicable.

Loadshedding: Survival Tips for Small Businesses

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“We want to assure business that by the time you get back to work in January, we will have a much more stable situation.” (Public Enterprises Minister, Pravin Gordhan, December 7, 2018)

With loadshedding now a constant reality in our lives and Eskom and the government offering no signs of any form of short-term recovery, small business owners are being forced to increasingly adapt in order to survive. Here are our top five tips that might help, beyond simply “buy a generator/inverter”.


Adopt work from home

Those who are single will have heard the advice to date someone on a different loadshedding schedule, and this tip can be liberally applied across a company. By allowing staff to work from home, most businesses can be reasonably assured of having someone online and capable of handling client calls and enquiries at any given time.

At the very least companies need to be looking at offering flexible work hours, so they don’t find employees sitting in the traffic caused by all the traffic lights being out, only to arrive at work to sit in the dark. Allowing staff to do the work when and where they want could do wonders for productivity. Perhaps you can even negotiate with a local coffee shop for discounts when your staff come to work there?


Move to cloud-based solutions

If you aren’t already using cloud-based solutions now is the time to adapt. Storing everything you do on the cloud with storage and backup solutions such as Dropbox or Microsoft’s OneDrive will mean your data can be accessed from anywhere and is much less likely to be lost should servers or computers become damaged by the power cuts. Set computers to do regular saves and backups so nothing gets lost.


Use mains-free tools

If your tools can come in a battery-operated version, then now is the time to start trading out of plug reliant technology. PCs should be traded in for laptops, electric cookers and fridges can be traded in for gas and everything from power tools to hairdryers have battery operated versions. Move your company’s main number to a cell phone or to a VoIP solution and make sure all key personnel cell phones are permanently charged.


Unplug equipment

The second the power goes down it’s time to unplug all the expensive equipment. Don’t take the risk of the surge destroying your vital machines, assembly lines and computers when the power comes back on. If you can, invest in insurance, but make 100% sure that it covers loadshedding damage, as some companies have removed that protection from their contracts.

Ensure that your, and your key employees’ Wi-Fi connections are attached to a UPS system.


Use more than one payment system

Using two or even three different network options will ensure you are always able to take payments whenever your equipment is charged, even if the power is off. Don’t lose a vital sale or shut up shop simply because you have a contract with one network service provider whose tower always goes down when the power is off.

And of course, get solar, install an inverter and/or buy a generator – there are tax incentives for some solutions that your accountant can help you with.

Budget 2023: The Minister of Finance Wants to Hear from You!

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“Finally, we pay tribute to the millions of South Africans, whose resilience and courage during these times of pandemic and economic hardship, is an inspiration to all of us who have the privilege to serve in the public sector.” (From the 2022 Budget Speech)

Finance Minister Enoch Godongwana has invited the public to share suggestions on the 2023 Budget he is expected to deliver on Wednesday 22 February 2023.

Go to National Treasury’s “Budget Tips for the Minister of Finance” page and fill out the online form.

Ignoring an Online Review Could be Catastrophic for Your Business!

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“Your most unhappy customers are your greatest source of learning” (Bill Gates)

If you have founded a business then there is little less certain than that at some point in the future, you will get a bad review. It’s simply impossible to please all of the people all of the time, which is why many business owners say they don’t worry too much about reviews and try to keep on doing their best. The sad part is, they really should be worrying about their reviews, both good and bad.

A series of recent reports suggest that there is little as damaging to a modern business as bad reviews that go unanswered. With 91% of all 18 to 34-year-olds saying they trust online reviews as much as recommendations from a friend and as many as 93% of all customers saying they check reviews before buying, the impact of a company’s online reviews is obvious. But there’s more – you should respond to all reviews, both good and bad. According to the BrightLocal Local Consumer Review Survey 2022, 57% of all consumers say they would be ‘not very’ or ‘not at all’ likely to use a business that doesn’t respond to reviews at all.

Under this climate it might seem that, while a good review could gather new customers, getting a bad review could be a death knell for your company. Fortunately, all kinds of reviews are good opportunities to show off your company, turn experiences around, and even gather customers. Assuming you do the right things. Here then is how you should be handling your online reviews.


Track your reviews

The first step is to make sure you know when and where a new review has been written about your company. How can you possibly respond to something you don’t know exists? Once you know a review is up, you need to react quickly. It’s no good responding years later.

Two different sites will help you to track and respond to reviews across the internet and may become valuable tools for managing your reviews as well.

First is Google my Business which not only allows you to manage and track your online reviews but can also help with sending information to clients and promoting your business. All it takes is a free account and you can help potential new customers find your business and ensure they get the information they need. Having positive Google Reviews can often be critical when it comes to customers making buying decisions.

In South Africa, Hello Peter has established itself as a core place to review companies and for companies to respond. While it can be more expensive to respond as a business, there are definite benefits and keeping tabs on your Hello Peter reviews will help you to know exactly where you stand.

Professional accounts on other sites like Trust Pilot or Media Tool Kit can also help you to track and interact with customer reviews. If you are a new company this may seem like an unnecessary or unwarranted expense, but as already seen, it can also be one of the most valuable tools you can use. If you are battling to find the space in your budget, it is highly recommended that you speak to your accountant about how to streamline and maximise your finances to ensure it can be afforded.


Respond to all reviews, good and bad

As already established, it’s absolutely vital that you respond to reviews, whether they are good or bad. According to the Local Consumer Review Survey 2022, 89% of consumers are ‘highly’ or ‘fairly’ likely to use a business that responds to all of its online reviews.

For a good review, you should of course thank the customer for their kind words (see some tips on how best to do that here), and you can also ask them if they would be open to you using what they said in future marketing. A bad review takes a little more finesse. While most sites give you the option to turn off reviews, avoid the temptation to do so. The worst thing you can do is censor your customers. According to Oberlo, 62% of customers say that they won’t buy from brands that censor reviews.


It’s not necessarily about what they said

For a bad review you may be tempted to reject what the reviewer is saying. Do not do this. The person reading your reviews is much more likely to side with the person leaving a review, even if they are being unfair or wrong. Instead, take this as an opportunity to show how good your customer service is. Those reading the review will understand that sometimes things go wrong and want to see how you react when they do, or how you react to unfair or mistaken criticism.

Customers who write reviews are desperate to be heard and understood. It is therefore vital that your response to a bad review does more than simply apologise. You need to show the customer that you are listening. This is done by looking into their particular experience, responding directly to that and clearly acknowledging how they are feeling. Ultimately, nothing is going to make this customer more upset than ignoring the way they feel or trying to invalidate their emotions.

Instead, take a minute to express their feelings are valid – “I am sorry for how you feel”, then back that up with what you are going to do to fix it. Describe the facts of their case, and show you know whom you are speaking to, then explain what will be done to correct their unhappiness. Conclude by asking if there is anything else you can do.

If it looks like the review process is going back and forth online, ask the customer for their contact details so you can respond personally. Never ask them to contact you. Asking them to contact you elsewhere suggests you are simply trying to hide your response while giving them the personal attention of a phone call makes them feel like they have been heard.


What to do with fake reviews

There is a third kind of review, one that can be even more damaging than a really bad review and those are reviews written by bots or fake accounts. Usually, these reviews are damaging simply because they tend to use much more emotive language. The reviews are never casually negative, but rather fumingly angry and as there will never be a response from the complainant, can make it look like you never resolved the problem.

Fake reviews are easy to spot. Usually, the reviewer will have no personal information, and their reviewing methods will be inconsistent. Additionally, their reviews are far more likely to link out to third-party products or websites. Often the review they left for you will be repeated on other sites and for other brands as well, so do a Google search to determine if this is the case.

Luckily handling them is simple, but it must be done. Simply find the administrator contacts for the review site and alert them to the fact that you have been fake reviewed with whatever evidence you have on hand. This should be enough to get those reviews taken down.


Ask for reviews

The final and best way to handle a bad star rating for your company is to ask happy clients to post positive reviews. If someone sends you an email or letter thanking you, why not pop them an email with a link asking them if they would consider leaving a formal review? WordStream has some more tips for you here. According to the Local Consumer Review only 3% of consumers will even consider using a company that has only 1 or 2 stars from reviews, down from 14% in 2020, so ensuring you keep that star rating up is going to be critical to your future success.