How 67 Minutes on Mandela Day Can Change Our World and Benefit Your Business
“What counts in life is not the mere fact that we have lived. It is what difference we have made to the lives of others that will determine the significance of the life we lead” (Nelson Mandela)
Nelson Mandela, our former president and world-renowned human rights champion, was born on 18 July. Fondly known as Madiba or Tata, his life was an inspiration to the world and he received more than 250 public honours, including the Nobel Peace Prize.
Why Mandela Day and why 67 minutes?
In recognition of his immense contributions, 18 July was declared Nelson Mandela International Day by unanimous decision of the UN General Assembly in 2009. It is more than a celebration of his life and legacy; it is a global movement to honour his life’s work and to change the world for the better.
On his 90th birthday, Madiba said: “It is time for new hands to lift the burdens. It is in your hands to make of our world a better one for all.”
This call-to-action started a worldwide movement for social change, led by the Nelson Mandela Foundation which said: “Nelson Mandela has been making an imprint on the world for 67 years, beginning in 1942 when he first started to campaign for the human rights of every South African. By dedicating 67 minutes of their time – one for every year of Mandela’s service – people can give back to the world around them and make a contribution to global humanitarianism.”
No matter how small your action, Mandela Day is about changing the world for the better, and celebrating the idea that each individual has the power to transform the world, the ability to make an impact.
Top tips for making an impactful contribution
- Align your company’s contribution with your vision and mission
- Focus your contribution around your product or service or expertise
- Make it a long-term commitment with an authentic contribution that will have a lasting impact
- Focus on your company’s immediate community
- Include your staff from the start
- Collaborate – invite your suppliers, clients and even competitors to participate in your 67 minutes initiative
- Advertise and market your 67 minutes initiatives – on your website, in the local newspapers and on social media using the hashtag #MandelaDay.
Ideas for Your 67 minutes
Madiba himself believed that education is what makes the greatest impact. He said: “Education is the most powerful weapon which you can use to change the world.”
For many companies, offering scholarships, internships, apprenticeships and mentorships is an excellent way to help change the world while reaping many benefits, including tax incentives and access to well-trained future employees.
Businesses can also simply contribute to the official Mandela Day Each1Feed1 campaign or join in a community initiative.
Companies can also link into the Mandela Day Global Network, a community of organisations, government, corporates and individuals that partner with the Nelson Mandela Foundation to drive Mandela Day and pursue its objectives. It is a base for the strategic partnerships of organisations with common goals aimed at globally coordinating efforts, sharing information and linking the needs to resources.
There are so many ideas…
- Dedicate 67 minutes to brainstorm and plan your company’s formalised contribution going forward
- Give your staff 67 minutes of paid time off work to support a charity or organisation of their own choosing
- Spend 67 minutes as a team painting, cleaning and maintaining a school, clinic or library
- Take 67 minutes to clean up the street or the local park, or volunteer to help out at a soup kitchen or animal shelter
- Kick-off a project to plant 67 trees or a community garden over the coming year
- Host a fundraiser such as a breakfast, fun walk or even a golf day to raise funds for a local cause
- Donate your 67 units of your products, service or expertise to a start-up company or a local charity organisation
- Pledge to donate R67 for each R50 raised for a cause by employees, clients and suppliers
- Donate 67 blankets, food parcels, rugby or football kits, bicycles or computers to a school, church or a local organisation
- Make company resources, such as delivery vehicles or computers, available to organisations when not in use (e.g. over a weekend)
- Host a party for emergency workers and volunteers, or treat a group of underprivileged kids or the elderly to a fun day.
What are the benefits to your business?
Social contributions improve not only the lives of the project’s beneficiaries but also of those who are involved –
- Creates an opportunity to link your business to a cause aligned with your corporate identity and business strategy
- Improved brand recognition through association and positive media coverage
- Placing your company in a positive spotlight improves corporate reputation and creates a competitive edge with regard to attracting and retaining investors, clients, suppliers and employees
- Increased customer loyalty: consumers are attracted to companies that contribute to a greater cause, as it allows them to feel they are making an indirect impact just by supporting your company and brand
- Higher employee satisfaction: a common cause for the greater good is an excellent way to bring employees together to make a difference as a team.
Download resources for businesses, schools, organisations and individuals, or a full Mandela Day toolkit, at https://www.mandeladay.com/ or visit the Nelson Mandela Foundation for more information.
What You Should Know About Airbnb and Tax
“All forms of rental income must be declared to SARS … We are … determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, in order to detect those taxpayers who do not comply by using data to identify risk” (extracts from SARS media statement 11 March 2021).
The Basics
Airbnb is an online app which allows homeowners to rent out their property to travellers on an ad hoc basis with very little admin from their side. Users of the app simply search and select properties that have been listed in the area they are visiting, then pay on the Airbnb platform. The owner is responsible simply for letting them in and making sure the property is as described in terms of quality and cleanliness. In return for this service Airbnb takes a percentage of the total rental charged as commission.
It’s a simple and clean system that to date has been extremely difficult for SARS to track. The recent announcement by the revenue service that it was aware owners were not declaring this income and thus underpaying owed taxes and that they are determined to tax this income does, however, suggest that things are about to change.
“We are determined to make it hard and costly for non-compliant taxpayers not willing to meet their obligations. We are working hard to improve system capabilities, in order to detect those taxpayers who do not comply by using data to identify risk,” SARS announced.
This in itself poses a problem for SARS as while it’s easy to see just who is renting their property out on Airbnb by looking at adverts and cross-referencing them with ownership records, it is more difficult to see just how much time was spent by guests in the property. Nonetheless, the announcement does seem to indicate a determination by SARS to put a stop to tax avoidance in this area and this could spell trouble for those who have been letting out their properties, most likely in the way of audits. But just what is owed by owners, and how would they correct this situation?
Income tax returns and registering for VAT
There is no doubt income derived from letting a property out on Airbnb must be declared on your income tax return. As SARS made clear, “This is the same principle that applies to any person who has rental income from letting out their property as a homeowner, placing them under the same obligation to declare such rental income to SARS”.
According to registered CA(SA) and Group Financial Controller for SYSPRO Louise Buchanan, “A property owner who hosts fee-paying guests like in the case of Airbnb, has to declare the rental income on their income tax return as it is considered gross income.” She warns that in addition to this, any property owner earning more than R1 million within a 12 month period would also need to register as a VAT vendor and charge VAT 15% on rental income.
What about deductions?
As always, any income that comes with costs can be reduced by a portion or percentage of certain of those costs allowable for tax purposes.
According to Buchanan only expenses which arise in relation to the production of rental income can be claimed as a deduction.
“These include levies, rates and taxes, electricity and water, home-owner’s insurance, advertising, bond interest and agent’s fees,” she says, cautioning that, “If only a portion of a property is rented out, then only pro-rata expenses related to that portion are deductible”.
What about Airbnb themselves?
Airbnb has a notice on its site which states that “In areas that Airbnb has made agreements with governments to collect and remit local taxes on behalf of hosts, Airbnb calculates these taxes and collects them from guests at the time of booking. Airbnb then remits collected taxes to the applicable tax authority on the hosts’ behalf.”
This can sometimes be confusing for the home-owner who may believe that tax has been paid on their behalf already. Unfortunately, South Africa is not one of the areas in which Airbnb has made an agreement with government to collect and remit taxes on its behalf. Owners with properties in other areas are, however, able to take advantage of this fact, and a full list of these areas can be found here.
What to do if you didn’t declare Airbnb income and owe back taxes
Homeowners who have not been paying taxes on their Airbnb income are still liable for those taxes and SARS has made it abundantly clear that they aim to find and crackdown on non-compliant owners.
“Taxpayers are reminded that failure to comply with their tax obligations may result in administrative penalties being imposed in addition to interest, or even criminal action being taken against them,” the revenue service said.
Buchanan explains that in practice what this means is that administrative penalties are likely to be imposed along with interest, but has also warned that it would not be unheard of for criminal action to also be taken against a defaulter. She therefore urges all Airbnb owners who may be in default to consider declaring their Airbnb income through the SARS voluntary disclosure programme, which offers more favourable penalty amounts and a significantly reduced chance of criminal procedures being instated.
If you are an Airbnb owner who has not declared this income, it would be wise to speak to your accountant to evaluate just how much you might owe in back taxes and to try clear up the situation before you are the subject of a tax audit.
Your Tax Deadlines for June 2021
- 7 June – Monthly Pay-As-You-Earn (PAYE) submissions and payments
- 25 June – Value-Added Tax (VAT) manual submissions and payments
- 29 June – Excise Duty payments
- 30 June – Value-Added Tax (VAT) electronic submissions and payments
- 30 June – Corporate Income Tax (CIT) Provisional Tax Payments where applicable
- 30 June – End of the 1st Financial Quarter
