Tuesday 27 April 2021

SILENCE ON QUEER BODIES

Cape Town - 27-years into democracy, South Africa is still faced with enormous inequality issues, and among them is the right to self-identification. The most vulnerable in that category is the Queer community.
We often speak about how hard it is being black, as the second you are born black, you inherit a world that seeks to use your blackness as a stamp of being a subservient being. You have to constantly fight to prove your existence and have your voice heard, sometimes to prove that you are also human. Now imagine going through this and still face oppression from your race, where your sex and gender is constantly in question. This is the everyday reality of many Queer people in Africa.
27-years into democracy and a country deemed to be the best to live in on the African continent because of its constitution, we still have to shout, protest and picket to have our voices recognised. We still have to carry placards that say "stop killing Queers" because another one who looks like me was murdered by his kind. We still have to organise protests against the killings of Eudy Simelane, Nathaniel Mbele, Motshidisi Pascalina, Noxolo Nogwaza, Adnaan Davids, Lindo Cele, Andile Ntuthela, Anelisa Mngqolo, or Lonwabo Jack.
On paper, we are heaven on earth, yet in reality, we are the opposite. Queer bodies continue to be killed and there is no word from those in positions of authority. When will the Prevention and Combatting of Hate Crimes and Hate Speech Bill (2018) be passed?
How loud must our cries be until we are heard? How many Queer bodies must be lowered six feet underground before the government speaks out about the killings of Queer bodies? Whom do we turn to when we need protection, and we are laughed at by the police? Who do we turn to when no one recognises our existence until its election time? When we have to live with the idea that we can be raped, beat, be burnt alive, and no one, not even a single soul, will rise to acknowledge our absence from this world. Do we remain mute? Do we still accept hate speeches against Queers as freedom of speech? How long must our bodies deteriorate before you can smell it rot?

Luchulumanco writes in his personal capacity.

Saturday 18 July 2020

THE IMPACT OF PUBLIC DEBT ON THE SOUTH AFRICAN ECONOMY.


INTRODUCTION
Economics can be defined as a social science concerned with the production, distribution, and consumption of goods and services. It studies how individuals, businesses, governments, and nations make choices on allocating resources to satisfy their wants and needs, trying to determine how these groups should organise and coordinate efforts to achieve maximum output. It is broken down into macroeconomics, which concentrates on the behavior of the aggregate economy, and microeconomics, which focuses on individual consumers and businesses.

Public debt, sometimes also referred to as government debt, represents the total outstanding debt (bonds and other securities) of a country’s central government. It is often expressed as a ratio of Gross Domestic Product (GDP). Public debt can be raised both externally and internally, where external debt is the debt owed to lenders outside the country and internal debt represents the government’s obligations to domestic lenders. According to Hadhek and Mrad (2014), public debt exists independently outside the public finances and budget. Therefore, public debt is a universal phenomenon that can be found in any economy in the world. This is because a loan is considered mainly as a component of modern public finance. In fact, public debt is closely related to the budget deficit. However, it appears that debt accumulation is necessary to finance investment projects.

In both academia and policymaking, the issue of how public debt affects economic growth has remained a concern (Mohanty and Mishra, 2016). The burden of public debt is an economic issue, dominating debates in different sectors of our society. The post-financial crisis era has been marked with an increasing level of public debt at an international, national and sub-national level (Masoga, 2018).  According to Focus Economics (2019), public debt is an important source of resources for a government to finance public spending and fill holes in the budget. Public debt as a percentage of GDP is usually used as an indicator of the ability of a government to meet its future obligations.

Humberto, Tadas, and Ausrine (2012) argue that public borrowing is a non-avoidable nor is it a reprehensible phenomenon of economic growth. Rather, it is regarded as a way to boost economic growth. This is because of money injection from foreign investors to the economy, and distribution of assets among those in possession of enough to utilise at present moments and those in need of assets to develop economic initiatives or other needs. Among the macroeconomic indicators, public debt is the main indicator forming an image of the countries in the international markets (Humberto, et al, 2012)

This essay seeks to determine whether public debt has an impact on the economic growth of The Republic of South Africa.


NATIONAL DEVELOPMENT PLAN
South Africa has drafted a National Development Plan (NDP) stating the vision for 2030. In the plan, it seems that the main focus is to reduce poverty and inequality. It is mentioned in the National Development Plan that the growth of the economy must be accelerated in such a way that all South Africans are benefited (National Development Plan, 2011). Therefore, rapid economic growth is said to be key in broadening opportunities for everyone. As proposed by the National Development Plan (2011), the accelerated economic growth is also one of the required priorities to raise employment in order to achieve the objectives of the National Development Plan. However, it seems to appear that the plan does not state much about public debt as an impediment to achieving the anticipated economic growth. In this study, it is important to bring to light the idea that achieving an economic growth rate will reduce poverty and inequality by 2030 and that it requires the government to deal with growing public debt. It is notable that many variables in the economy may restrict the likelihood of achieving some of the objectives of the National Development Plan by 2030 (National Development Plan, 2011). However, in this essay, the primary focus is on public debt so as to reveal its impact on South Africa’s economic growth. The National Development Plan suggests that the economy should grow by 5 percent a year to ensure the acceleration of employment and economic transformation (National Development Plan, 2011).

ECONOMIC GROWTH
Goal number 8 of the United Nation’s Sustainable Developmental Goals (SDGs) outlines the importance of achieving economic growth for 193 countries before 2030. (United Nations 2018). As the global economy is adapting to the fourth the industrial revolution, countries have been mandated to invest in what is deemed critical areas such as technological development, human capital, artificial intelligence and machine learning. Without these important investments, economic growth will be stagnant, and the countries will become less competitive with investment being channeled into traditional methods (World Economic Forum, 2017).

The South African economy is the second-largest economy in Africa, after Nigeria. Since the dawn of its international sanctions in 1996, South Africa’s GDP has almost reached a peak of $400 billion in 2011 but has since declined to roughly $385 billion in 2019. During this period, foreign exchange reserves increased from $3 billion to nearly $50 billion thus expending a diversified economy with a growing middle class, within two decades of ending Apartheid while recording its highest yet public debt equating to 62.2% of the country’s GDP. This followed an incline of 5.5% from 2018.

In September 2019, the country’s GDP contracted by 1.4 percent in its fourth quarter, following an increase of 0.8 percent contraction in the previous period and a 0.1 decrease. In the same quarter South Africa, experienced its worst rolling blackouts which harshly affected seven industries, being, government services (-0.4% vs 2.4% in Q3); utilities (-4% vs -4.9%); agriculture, forestry & fishing (-7.6% vs -4.5%); trade, catering & accommodation (-3.8% vs 2.6%); manufacturing (-1.8% vs -4.4%); storage & communication (-7.2% vs -5.4%) and construction (-5.9% vs -6.9%). Nevertheless, output for mining bounced back (1.8% vs -6.1%) which was boosted by iron ore, gold, and platinum group metals. The financial sector grew (2.7% vs 1.6%). In March 2020, the South African economy was confirmed to be in a recession and with an increase of 6.5% in poverty levels.

PUBLIC DEBT EFFECT ON ECONOMY
Previous research done on government debt indicates that affects a country’s economy in either a positive or negative manner. This effect mainly lays with the amount of debt and its purpose. The amount of debt to be borrowed by a state is typically measured using the debt-to-GDP ratio. In contrast, Reinhart, Reinhart, and Rogoff (2015) claim that the ratio should be at most 90%. The economy would be able to grow with the debt threshold of less than 90 percent. Beyond the threshold, public debt will cause an adverse effect on the economy. It is proven empirically by looking at the case of developing countries, in which the debt threshold was found at 88.2% (Karadam 2018). The economy can grow positively when the debt level is below the threshold. However, when public debt to GDP exceeds the threshold, the growth starts to decline.

Lower economic growth that is caused by high public debt can also be explained through the overlapping generations model (Blanchard, 1985; Diamond, 1965; Modigliani, 1961), where the increase in the public debt will be partly used up national savings that were meant for future generations. A reduction in the level of national savings will force the interest rate to increase, thus demotivate incoming investors. Lower investments will result in lower capital accumulation, leading to lower economic growth.

JUSTIFICATION OF PUBLIC DEBT
I.                   UNFORESEEN EMERGENCIES
South African government, like any other government, often resorts to public borrowing in order to meet unforeseen emergencies such as war, flood, draught and in the latest unfolding, the COVID-19 epidemic, where the government secured R500 million worth of funding from the World Bank, International Monetary Fund and the Development Bank. Such huge expenditure of national emergency or disaster cannot be met solely by taxation, particularly in developing countries such as South Africa.

       I.            FOR ECONOMIC DEVELOPMENT
As already mentioned, public borrowing is perceived to be a vital source of development finance. The state is required to build up industries, economic and social infrastructures. The inadequacy of tax revenue has led the government to adopt the borrowing policy to finance these activities. In the long run, these economic activities, are revenue-yielding. Since they are revenue-yielding or permanent income generators, government borrowing is justified.

    II.             TO CURB INFLATION
By resorting to public borrowing, the government can draw off excessive purchasing power of the public. In an already inflationary situation, since people’s disposable income tends to rise, their purchasing potential also rises. Under the circumstance, the purchasing power of the people can be curbed by resorting to borrowing by the government. However, some economists argue that, as an anti-inflationary method, taxation works better.

 III.             TO CONTROL DEPRESSION
During depression, economic activity remains at a low level. To stimulate the economy, what is required is the increase in public spending. Public works programmes are one such example of government investment spending. Under depression, financing of economic activity through taxation is not advisable. By increasing the volume of government spending an economy can be stimulated and, government spending has a multiplier effect on income and employment. Thus, additional government spending financed through public borrowing may revive the economy from a state of depression.

CONCLUSION
Public borrowing is unavoidable in certain circumstances and not essentially bad for a state as there is no mutual consensus on the relationship between public debt and economic growth. The relationship can be positive, negative, or even non-linear. Public debt can only destabilise an economy if it rises to an abnormal extent, of which that is not that case in the Republic of South Africa. The 90% threshold as argued in the Reinhart-Rogoff hypothesis, is not applied across all countries. The findings may help governments and policymakers to design their own fiscal policy by investigating how existing debts affect the growth level.



REFERENCES

Blanchard, O. (1985). Debt, deficits, and finite horizons. Journal of Political Economy, 93(2), 223–247.

Diamond, P. A. (1965). National debt in a neoclassical growth model. The American Economic Review, 55(5), 1126–1150

Focus Economics. (2019) Public Debt (% of GDP). Retrieved from  https://www.focus-economics.com/economic-indicator/public-debt

Hadhek, Z. and Mrad, F. (2014). Debt and Economic Growth, International Journal of Economics and Financial Issues, Vol. 4 (2), pp. 440-448.

Humberto, N.R.R., Tadas, V. and Ausrine, L. (2012). The Effect of Public Debt and Other Determinants on the Economic Growth of Selected European Countries, Economics and Management, Vol. 17, pp. 914-921.

Karadam, D. Y. (2018). An investigation of nonlinear effects of debt on growth. Journal Of Economic Asymmetries, 18, 1–13.

Masoga, MM. (2017). The Impact of Public Debt On Economic Growth In South Africa: A Cointegration Approach, 1, 1-3.

Modigliani, F. (1961). Long-run implications of alternative fiscal policies and the burden of the national debt. Economic Journal, 71(284), 730–755.

Mohanty, A.R and Mishra, B.R. (2016). Impact of Public Debt on Economic Growth: Evidence from Indian States, Vilakshan, XIMB Journal of Management, Vol.13, pp.1- 21.

National Development Plan. (2011). Our future makes it work, Executive summary, 2030, National planning commission.

Reinhart, C. M., Reinhart, V., & Rogoff, K. (2015). Dealing with debt. Journal of International Economics, 96(S1), S43–55

United Nations. (2018). Sustainable development goals. Retrieved from https://www.un.org/sustainabledevelopment/

World Economic Forum. (2017). The global competitiveness Report 2017–2018. Geneva: World Economic Forum


Wednesday 24 June 2020

ANC WARD 115 – CONGRATULATES THE ANC FOR A SUCCESSFUL VICTORY IN DECLARING BO-KAAP A HERITAGE SITE

After several attempts by the Democratic Alliance to sell the Bo-Kaap area to the highest bidder, we are proud to congratulate the ANC Dullah Omar Regional leadership, alongside our leaders in the Provincial Legislature in the Western Cape province and Sub-council 16 on leading successful motions in declaring Bo-Kaap a heritage site.

As the ANC we have always been anti-gentrification. We deem this as an unfortunate event that still bares scares of the dark times of Apartheid and the Union of South Africa, for many of our people. The ongoing gentrification of Woodstock and Sea Point is something we condemn with the highest contempt it deserves.

The struggle of Bo-Kaap has been a long journey that saw all-hands-on-deck from the ANC structures to the ANC Youth League structures in the province. It is one where the President of the Republic of South Africa, had reassured the Muslim community in his address to the Muslim Judicial Council that he agrees that Bo-Kapp should be declared a living heritage (area) however processes must be followed in doing so.

This is a victory the ANC celebrates with the people Bo-Kaap and this victory for them. In 2018, Bo-Kaap, experienced several protests by its community members who opposed the continued gentrification and private development that represents a serious threat to the character, culture, history and peoples' livelihood of Bo-Kaap.

When we speak of Land Redistribution, this what we mean. People being given land and not sold to private developers. This is a victory we celebrate with the people of Bo-Kaap.

Let us all stop gentrification on 08 May 2019 and vote ANC.

Issued on behalf of Ward 115 by
Branch Secretary 
Luchulumanco Nanto
062 685 4615

Friday 8 May 2020

HAWKERS LEFT IN THE COLD DUE TO COVID-19

South Africa is in the third week of its national lockdown due to COVID-19 which is responsible for the death of 25 citizens. This comes from a total of 73 028 tested citizens with 2 003 confirmed cases and 410 recoveries.

With this outbreak, President Cyril Ramaphosa announced that the country will be on lockdown, effective 27 March, for 3 weeks. This was later extended to 2 weeks on 09 April.

As a result, South Africans have been asked to stay at home and only leave their homes when they require essential items such as medicine or food. The sale of alcohol and cigarettes has been prohibited during this period as well as walking for exercise or jogging. Public gatherings have been banned and funerals are restricted to 50 people.

Only those who carry out essential services have been permitted to work from their respective workplaces whilst the rest of the country has been asked to work from home. These employees are always expected to carry with them a permit that states that they carry out essential services.

This global epidemic has harmed the global economy where the Gross Domestic Product (GDP) of many countries has decreased. South Africa was not immune to this, as the country is left in a recession and with an increase of 6.5% in poverty levels. The country’s GDP has contracted by 1.4% in its fourth quarter. This followed a revised 0.8% contraction in the third quarter. With the current economic state, many companies are considering the retrenchment of staff members to avoid running on a deficit.

R500 million was allocated by the Department of Small and Business Development to assist Small, Medium and Micro Enterprise (SMME) in distress, and the National Treasury has further allocated R30 billion to the COVID-19 Temporary Employer/Employee Relief Scheme to support companies that are closed during the lockdown. The requirements for SMMEs to access the funding are:
*They must be 100% owned by South African citizens
*They should employ at least 70% of SA nationals       
*They must be registered with the South African
*Revenue Service (SARS) and tax-compliant.

Despite this initiative, the self-employed and hawkers are excluded as they do not qualify for any COVID-19 related benefits. This means that many South Africans are left without any source of income. To ensure compliance, the South African National Defence Force (SANDF) and the South African Police have been deployed throughout the country. With this, many hawkers are unable to trade and as a result, have no source of income as they are forced back into their houses.

In the township of Alexandra, hawkers have been battling for a permit they were promised that would allow them to be able to carry on trade on the streets and outside shopping centres, however, there have been complications with the jurisdiction of the permit, as the permits received by hawkers are not stamped with an official government stamp and as a result, the SANDF render the current permits they have null and void. Defenceless hawkers are left out in the cold to defend themselves against armed soldiers and police. No official has thus far taken ownership of this.

Tuesday 19 March 2019

THE IMPORTANCE OF ACKNOWLEDGING AND EMBRACING DIVERSITY IN THE WORK PLACE

INTRODUCTION 
Diversity, as defined by Katz et al., (1994) means having distinct or unlike elements. In the workplace, diversity means employing people who may be different from each other and who do not all come from the same background. The differences may be those of national origin, physical appearance, religion, education, age, gender, or sexual orientation.

With the ever-changing business environment, business owners are adopting diversity policies and strategies that appeal to their employees, clients, vendors and suppliers. Diversity in the workplace brings with it a host of potential benefits, as well as potential conflicts for business owners to manage.

From this definition, one can conclude that workplace diversity means creating an inclusive environment that accepts each individual's differences, embraces their strengths and provides opportunities for all staff to achieve their full potential.

The Anti Discrimination Commission Queensland (2013) argues that valuing differences allows each person to contribute their unique experiences to the workplace and can impact positively on not only internal activities and relationships, but the experiences of customers and other stakeholders as well.

WAYS TO INCORPORATE DIVERSITY
According to Brooklins (2019), businesses find ways to incorporate diversity into their workplaces without causing major changes to the way their companies operate. Incorporating diversity practices in a workplace can include recruiting from diverse talent pools to make the company open to employees from various backgrounds. Diversity may be infused into advertising practices to ensure products and services are targeted to all consumers who represent the target market, whether through print, online, television or radio.

In South Africa, the Employment Equity Act, No. 55 of 1998 was designed to achieve equity in the workplace by promoting equal opportunity and fair treatment in employment through elimination of unfair discrimination and implementing affirmative action measures to redress the disadvantages in employment experienced by designated groups, to ensure equitable representation in all occupational categories and levels in the workforce.

SIGNIFICANCE
As workplaces embrace the idea of diversity, they often realize benefits that help improve their companies, from new ideas to increased international opportunities. Diversity can add varied ideas and perspectives to the workplace. Research compiled by the Journal of Small Business Management suggests that employers who recruit diverse workforces open their businesses to a wide range of ideas. Businesses compile these varied opinions and ideas as they make decisions about how to start, run and finance their operations and market their products or services.






BENEFITS
Companies that set out to recruit a diverse workforce, rather than settling for a homogeneous environment, open their businesses to a larger pool of applicants. As a result, they increase their ability to access candidates who are most qualified for the positions they're looking to fill. Dr John Sullivan, a consultant and educator on ere.net, a recruitment website, notes businesses that opt not to recruit from diverse pools of talent may not only miss talent but also be forced to increase recruiting costs.
While diverse workforces aren't limited to employees from different countries who speak more than one language or have varying ethnic backgrounds, employees with these characteristics are beneficial to companies looking to expand or improve existing operations in national, regional or local markets. The belief is that expansion will drive profits for companies, though Sullivan, 1986:49 cautions that profitability as a result of a diverse workplace depends on location and target market.

EMPLOYER RESPONSIBILITIES
Providing a workplace free from discrimination and harassment is one of the basic responsibilities of an employer. A workplace with a variety of individuals needs to be managed in a manner that accommodates all individuals and does not infringe on any right that they may have, be it belief, tradition or freedom of identification. Having worked at Old Mutual as a Personal Financial Adviser, I have had first-hand experience of a diverse working environment where the one binding objective between staff is the objectives of the company. Old Mutual, being a corporate, has a culture of embracing diversity and this has worked its favour. Potentials investors are often also attracted by the pool of diversity in the workplace. Ensuring that there is diversity in the workplace all depends on the employer.

As already said above, the major threats to diversity in the workplace are discrimination and harassment. Although sexual harassment has received most of the public attention, harassment can take many forms. As employers add staff from a variety of ethnic, religious, age, and cultural groups, maintaining a harmonious workplace is critical. Given our increasingly litigious society, it is inevitable that court decisions related to other forms of harassment will increase.

Examples of harassment include epithets, slurs, negative stereotyping, or threatening acts toward an identified person or group. Other examples include written or graphic material placed on walls, bulletin boards, or elsewhere on the employer's premises that denigrates or shows hostility or aversion toward an individual or group. Included in this definition are acts that purport to be pranks but, are hostile or demeaning.

Brooklins (2019) further argues that a major challenge for all employers is to assimilate a variety of employees into the mainstream of corporate life. Women and minorities are sometimes excluded from social activities or left out of informal communications networks. The result appears to be a sense of isolation, lower organizational commitment, and ultimately a decision to seek employment in a more welcoming environment. For example, a woman feeling left out may think that too much emphasis is placed on getting along with others in senior management: "As a woman, I do not fit into the group of males who go to lunch together and play golf together. These are the guys who get the promotions."

DISCRIMINATION
Making prejudgments is part of human nature because a person cannot anticipate every event freshly in its own right. Although prejudgments help gives an order to daily living, a person's mind has a habit of assimilating as much as it can into categories, which may result in irrational judgments. A person acts with prejudice because of his or her personality, which has been formed by family, school, the media and community environments.

Prejudice has been defined as an attitude based partly on observation and partly on ignorance, fear, and cultural patterns, none of which has a rational basis. A prejudiced person tends to think of all members of a group as being the same, giving little consideration to individual differences. This kind of thinking gives rise to stereotypes.

Stereotypes, like prejudices, are based partly on observation and partly on ignorance and tradition. For example, a person who assumes that all women are overly emotional is subscribing to a widely held but false stereotype.

Stereotypes are difficult to overcome because they usually develop over a long time. Some stereotypes are shared by many people, giving them an illusion of rationality. Many people, however, are trying to rid themselves of stereotyped thinking about others. This effort reflects a growing consciousness that people are individuals and can and should be treated as such.

The basis of prejudice toward a subgroup of society is often found in economic or psychological factors. Most free-market countries have a diversity of social groups. The social mobility concept postulates that as one sub-group moves up in economic terms, it is replaced by a less fortunate subgroup that is seeking a better way of life.

RACIAL PREJUDICE
Besides, the fact that diversity enables the company to prosper as people of various backgrounds are all contributing positively to the growth of the company to reaching its objectives. South Africa is a country fresh into a democracy with 24 years of exercising democratic power. The country is still facing a high racial tension among its citizens more especially with the ongoing Land Expropriation without compensation debate across the country. This is a threat as it opposes embracing diversity and because of this, the staff does not perform optimally as they would have if they were united, hence it is important to not only have policies that are anti-racial prejudice or discrimination but to also have a culture that seeks to oppose it by embracing diversity.

GENDER ISSUES
Many women have felt discriminated against in the workplace. Advancement into management positions for women has been difficult. Since the late 1990s, more and more women have not only entered the workforce but also have been promoted into management positions. Some would argue that men and women influence the workplace differently. Women are perceived as exercising leadership through strong interpersonal skills. Male leadership can be perceived as more direct, impersonal, and focused on results. A diverse team incorporating different styles of leadership will do more to help employers succeed in today's marketplace.

Traditionally, women have been discriminated against in terms of pay. The wage gap continues to narrow slowly. For various reasons, women's pay is gaining parity with men. For example, many high-paying manufacturing jobs have disappeared, forcing many men into jobs in lower-paying service industries.

The work culture is corporate continues to mature; an increasing number of minority youths are becoming part of the workforce; gay men and lesbians are becoming an important part of the workforce and marketplace; people with disabilities are also increasingly entering the labour force, and business is becoming more global. Organizations that continue to exclude some segments of the population from their workforce risk sending the less-than-subtle message that some employees and perhaps some customers are less valued, less important, and less welcome. This will have a negative effect on the bottom line.

CONCLUSION 
Living in a fast-paced world that is ever-changing and more laws more liberal laws are being passed, it's important to create an environment where all staff feel valued and accepted and no group feels as the minority. Embracing diversity should not just be a word of mouth but should be a practised and policies that seek to impose on that should be removed from the memorandum of incorporation. Embracing diversity is a great step in fulfilling a company’s mandate. Be it a private, public, or even a government. The beauty of diversity is that all individuals are able to contribute positively to the objectives of the company and are able to reach a greater diverse audience as the company appeals to more persons.

BIBLIOGRAPHY
What are the benefits of diversity in the workplace. https://theundercoverrecruiter.com/benefits-diversity-workplace/

South Africa. Department of Labour. 1998. Employment Equity Act. Pretoria: Government Printer
Hymowitz, Carol (2005, October 24). "Too many women fall for stereotypes of selves, study says." The Wall Street Journal, p. B1.

Katz, Judith H., Miller, Frederick A., and Seashore, Edith W. (1994). The promise of diversity: Over 40 voices discuss strategies for eliminating discrimination in organizations. Burr Ridge, IL: Irwin.
Rout, Lawrence (Ed.). (2005, November 14). Leadership [Special section]. The Wall Street Journal, section R.

Tatum, Beverly Daniel (2003). "Why are all the black kids sitting together in the cafeteria?": And other conversations about race. New York: Basic.

Statistics South Africa. www.statssa.gov.za/?page_id=3836

Diversity in the Workplace. https://www.adcq.qld.gov.au/resources/for-employers/diversity-in-the-workplace

Define Diversity in the Workplace. https://smallbusiness.chron.com/define-diversity-workplace-4926.html

Saturday 16 March 2019

EVOLUTION OF SOUTH AFRICAN TAXATION FROM THE UNION OF SOUTH AFRICA TO THE REPUBLIC OF SOUTH AFRICA

INTRODUCTION

The Republic of South Africa is the youngest country in the world to gain independence from its former colony, the British Empire. The country prior, 1948, was known as the Union of South Africa, and broken up into four colonies, namely:

  1. Cape Colony 
  2. Natal Colony 
  3. Transvaal and the 
  4. Orange River Free State. 

With such an administration, each colony governed itself and was responsible for its own budget.
In 1948, Apartheid South Africa was born. This saw the country being divided into small indigenous groups known as Bantustans, which too, was self-governing and oversaw their own finances and budget.

In 1994, the country held its first democratic elections, which saw Africans being allowed to vote and contest senior state positions and being able to move around the country freely, without the need of a dom-pass or being banned from certain areas being known as “whites only”.
Whatever transition the country might have faced, each transition came with a new legislature.
This essay seeks to unpack the evolution of taxation in South Africa, from its colonization days under the British Empire, as the Union of South Africa, to its Afrikaner Broederbond rule, South Africa, to the modern Democratic Republic of South Africa.






UNION OF SOUTH AFRICA






SOUTH AFRICA






DEMOCRATIC OF SOUTH AFRICA











History of Taxation in South Africa 


HISTORY ON THE INCOME TAX ACT

Pre the establishment of the Union of South Africa, each colony depended on its own trade duties, indirect taxes and user fees for their respective revenue income. This was changed in 1910. This change saw all general taxes being implemented in the Cape and Natal colonies.
Post the formation of the Union of South Africa, there was a change in the Income Tax Act, with the Income Tax Act 28 of 1914 being passed in legislation. This Act gave room to the removal of general taxes being implemented in the Cape and Natal colony. This was also the first Act to be introduced under the new formation. This Act gave room for the Union of South Africa, to tax on profits and gains from sources in the Union of South Africa. In 1917, the Union, passed a new Act in 1917, the Income Tax Act 41 of 1917, which replaced Income Tax Act 28 of 1914 and the Mining Tax Act 6 of 1910.

This new Act was amended in 1925, with the Income Tax Act 40 of 1925 being passed into legislation and replacing the previous Act. Tax on donations was first introduced in 1955 and was included in this amended Act. All Income Tax Acts from 1941 to 1961 were amended into one Act, under Income Tax Act 58 of 1962, which is still into existence even today. Ever since then, many amendments to the Act have been made. Most of these amendments have a direct impact on the individual taxpayer in the Republic of South Africa, such as the introduction of the PAYE system in 1963, termination of Provincial Income Tax in 1971, the introduction of Fringe Benefits in 1984, as well as the introduction of the tax on Capital Gains in 2001. 

THE EFFECT OF THESE CHANGING TIMES ON SOUTH AFRICANS
Apartheid did not have a major effect on income tax in South Africa, as there were no race-specific rules in the income tax law. Due to the conservative mindset of the apartheid government, the tax laws did encourage married women to be home executives (housewives). There were separate income tax tables for unmarried persons, married men (taxed less as they were assumed to be the breadwinner of the family) and married women (taxed more than unmarried persons because they were supposed to be home executives).

This created an unintended consequence as it was more tax-advantageous for two working people to live together in a de-facto relationship than to get married. Polygamy was legal in South Africa, "second and subsequent wives" were taxed as "unmarried persons".

The international attitude towards Apartheid also had an effect. Many countries would not cooperate with the South African government and as a result, the South African income tax was limited to income sourced within South Africa. Foreign sourced income was tax-free.

After the post-apartheid constitution was adopted, all forms of discrimination became unconstitutional, and the income tax law was changed to remove all discrimination between men and women, married and unmarried, large families and small families.


Income Tax Act No 58 of 1962

As previously stated, the Income Tax Act 58 of 1962 was amended and divided into 112 sections and 10 schedules. The amended Act contains provisions for the levying of four different types of taxes, namely: 
  1. Normal tax 
  2. Donations tax 
  3. Dividends tax 
  4. Withholding taxes

On an annual basis, new amendments are made to this act through The Taxation Laws Amendment Act and The Revenue Laws Amendment Act. These amendments are a result of the new proposals through the Budget Speech by the Minister of Finance before Parliament. These amendments are subject to the approval of Parliament, which then gets passed into law.  

NORMAL TAX 
Normal Tax is a levy that is imposed on all persons who have taxable income. This type of tax is an annual tax that is calculated by applying predetermined rates to the taxable income of a person, be it juristic or natural. This tax is divided into individual income tax and company income tax. The rates for the 2019/2020 financial year are: 
  • Individuals and special trust – Ranging from 18% - 45% depending on the income)  
  • Trust other than special trust – 45%  
  • South African companies – 28%  
  • Small Business Corporation – ranging between 0% and 28% depending on the income 
  • Retirement – first R500 000 exempt from tax and thereafter scaled on 18% - 36%
Taxable income (R)
Rates of tax (R)
0 – 195 850
18% of taxable income
195 851 – 305 850
35 253 + 26% of taxable income above 195 850
305 851 – 423 300
63 853 + 31% of taxable income above 305 850
423 301 – 555 600
100 263 + 36% of taxable income above 423 300
555 601 – 708 310
147 891 + 39% of taxable income above 555 600
708 311 – 1 500 000
207 448 + 41% of taxable income above 708 310
1 500 001 and above
532 041 + 45% of taxable income above 1 500 000



DONATIONS TAX
This type of tax was introduced in 1955 when the state prioritised the Estate Duty Act. Unlike other taxes, this type of tax does not tax on income rather on the transfer of wealth from one person to another. Donations tax is levied at a flat rate of 20% on the cumulative value of property donated not exceeding R30 million, and at a rate of 25% on the cumulative value exceeding R30 million. The first R100 000 of property donated in each year by a natural person is exempt from donations tax. In the case of a taxpayer who is not a natural person, the exempt donations are limited to casual gifts not exceeding R10 000 per annum in total.


DIVIDENDS TAX 
Dividends tax is a final tax at a rate of 20% on dividends paid by resident companies and by non-resident companies in respect of shares listed on the JSE. Dividends are tax exempt if the beneficial owner of the dividend is a South African company, retirement fund or other exempt person. Non-resident beneficial owners of dividends may benefit from reduced tax rates in limited circumstances. The tax is to be withheld by companies paying the taxable dividends or by regulated intermediaries in the case of dividends on listed shares. The tax on dividends in kind (other than in cash) is payable and is borne by the company that declares and pays the dividend.


WITHHOLDING TAX 
Withholding tax is an advanced payment of the normal tax. It is payable by the employee to South African Revenue Services (SARS). It has a tax rate of 15% on the gross amount which is from South African sources of royalties, interest, amounts payable to non-residents for activities performed in South Africa. 7,5% is withheld from payments to non-resident individual selling immovable property and 15% is withheld from non-resident rust selling immovable property.


TURNOVER TAX

  • MICRO-BUSINESS:  

A person may only qualify as a micro business if that person is a natural person, a company, deceased or insolvent estate of a natural person registered as a micro business at the time of death or insolvency. This type of business is taxed on it's year-end using the following table

TAXABLE TURNOVER(R)
RATE OF TAX(R)
0-335000
0%
335001-500000
1% of the amount above 335000
500001-750000
1650+2% of the amount above 500000
750001 and above
6650+3% of the amount above 750000
  • FARMING:
Farming operations include livestock farming, crop farming, milk production and plantation farming. A person getting income from these farming operations may under paragraph19(5) of the First Schedule, choose to be subject to the tax according to the rating formula set out in section5(10).
  • RETIREMENT 
With effect from 1 March 1998, retirement funds are amounts that are contributed to pension, provident and retirement annuity funds during the year of assessment and are deductible by members of those funds. The deduction is limited to the lower of R500 000 or 27.5% of the taxable income, before the inclusion of a taxable capital gain. In terms of lump sum payments, the first R500 000 is exempt from tax and thereafter taxed according to the taxable income bracket limited to 130 500 + 36% of taxable income above 1 050 000.
  • PROVISIONAL TAX
A provisional taxpayer is any person who earns income by way of remuneration from an unregistered employer or income that is not remuneration or an allowance or advance payable by the person’s principal. An individual is not required to pay provisional tax if the individual does not carry on any business and the individual’s taxable income 
  • will not exceed the tax threshold for the tax year; or  
  • from interest, dividends, foreign dividends, rental from the letting of fixed property and remuneration from an unregistered employer will be R30 000 or less for the tax year. 
Provisional tax returns showing an estimation of total taxable income for the year of assessment are required from provisional taxpayers. Deceased estates are not provisional taxpayers. 

  • FRINGE BENEFITS
Was first introduced in the year 1986. It was implemented to overcome problems in the income tax law that allowed benefits other than salaries and wages to be free of tax. The taxable value is 3.5% of the cash cost including VAT per month each vehicle. The tax rate as from 1 August 2017 is 7.75% per annum on Fringe Benefits.

  • CAPITAL GAINS TAX
Capital gains on the disposal of assets are included in taxable income. The maximum effective rate of tax: 
  • Individuals and special trusts 18%  
  • Companies 22.4%  
  • Other trusts 36% 
Events that trigger disposal include a sale, donation, exchange, loss, death and emigration. The following are some of the specific exclusions:  
  • R2 million gain or loss on the disposal of a primary residence;  
  • most personal use assets; 
  • retirement benefits; 
  • payments in respect of original long-term insurance policies; 
  • annual exclusion of R40 000 capital gain or capital loss is granted to individuals and special trusts; 
  • small business exclusion of capital gains for individuals (at least 55 years of age) of R1.8 million, when a small business with a market value not exceeding R10 million is disposed of; and 15 
  • instead of the annual exclusion, the exclusion granted to individuals is R300 000 for the year of death.
Was introduced into the Income Tax Act on 01 October 2001. It is effectively charged by adding a percentage of the increase in the value of an asset, that was actually disposed of for more than its base cost, to the taxpayer's taxable income. Section 26A states that a taxable capital gain is to be included in taxable income.


OTHER TAXES 
  • Value Added Tax
The Value-added Tax (VAT) was introduced in 1991 to replace the General Sales Tax and at a standard rate of 14 per cent. The VAT is levied on a very broad base. Certain education and health services, financial services, and services of non-10 governmental organisations were also exempt. Furthermore, certain commodities consumed mainly by low-income households were “zero-rated” VAT increased in 2018 to 15%

  • Transfer Duty
Was introduced in 1686 and is the oldest tax still in use in South Africa. It is an indirect tax that is paid on the transfer of fixed property in South Africa. It is to be paid by the purchaser.

  • Securities Transfer Tax
Is defined as a depository receipt in a company’s levied on the transfer of security. Was implemented from 1 July 2008 under the Securities Transfer Tax Act, 25 of 2007 as well as the Securities Transfer Tax Administration Act 26 of 2007. The tax is imposed at a rate of 0.25% on transfer of listed and unlisted securities.

  • Customs and Excise Duty
Are imposed on the numbe r of consumer goods. Excise duties have increased on tobacco and alcohol as from 1 November 2017 to 10.25%.


CONCLUSION 
Income Tax has greatly improved and has become inclusive of non-discriminating based on gender as done previously. Despite South African tax legislation being ranked as one of the best in the world, countless debates are still being held about the effect of the tax on the poor and the management of tax funds in South Africa, which is currently haunted by non-accountability and corruption.



BIBLIOGRAPHY
BOOKS:
1. Huxham, K. &Haupt, P.2008.NOTES ON SOUTH AFRICAN INCOME TAX.SA: Cape Town.H&H PUBLICATIONS
2.De Koker, A., Williams, RC.&Silke, J.2012-2013.SILKE TAX YEARBOOK.SA: Cape Town
JOURNALS:
Goldswain, G.K.&Swart, O.2015.SOUTHERN AFRICAN BUSINESS REVIEW,19(1):71-96, January 2015
ACTS:
South Africa.1962.Income Tax Act No.58 of 1962.Pretoria: Government Printer
INTERNET:
1.Chapter 3: The imposed tax burden in South Africa [Online].Available from:www.sahistory.org.za/topic/union-South-Africa-1910.[Accessed 29/03/2018]
2.www.sars.gov.za.
3. SOUTHERN AFRICAN BUSINESS REVIEW[Online].Available from:https://journal.co.za/contents/sabr/19/1/EJC175550.[Accessed 29/03/2018]
INSTITUTION:
South African Revenue Services Cape Town Offices

















Monday 4 June 2018

RIP CDE. MAKADUNYISWE "DUMZA DURA" NGUQU

Cde Dumza Dura Nguqu if you meet Cde Adaduma Wushekazi Cekwana there tell her we say hi and we still think about her.
May you both continue to shine in your afterlife.
Simphiwe Dana, once featured Mthwakazi, on the song Inkwenkwezi, and its a song I to dedicate to both of you.
Apho ukhona
Londaw’ okuyo
Ndiyathemba
Uyintyatyambo
Ndibona wena
Ezinkwenkwezini
Ndiyathemba
Uyinkwenkwezi
Sibane sam
Noma lisibekele nkwenkwezi
Ndiyabuva u
Bugqi bobukho
Bumnyama bungaka nkwenkwezi
Ndibona wena
Bumnyama bungaka nkwenkwezi
Uyinkwenkwezi
Khany’ ebumnyameni
Ubumnyama bungaka
Ngathi uwedwa
The loss of Cde Dumza Dura Nguqu from the SASCO Tisha Vanga Branch, is not only the loss of our sister branch, as the SASCO Cape Town branch, but the loss of the entire province.
Death has once again consumed one the most true and dedicated Cde's of our time, who served the organisation selflessly. He will forever be remembered for being a wise humble fearless soldier whom in his activism has always put the needs of others before his. This is evident by the faith that the Tisha Vanga branch had in him which led to his election as the Branch Chairperson earlier this year.
The best we can do to honour Cde Dumza's memory to ensure his name is not marked off in the books of history and that we all rally behind the Tisha Vanga branch in these upcoming elections to ensure total victory. I am confident that Cde Dumza's spirit will lead us to total victory not for only the Tisha Vanga campus but for most CPUT campuses. And for the sake of his name, we will not rest until power is regained.
In this sad time, we say condolences to the family and friends of this Cde. May you all find comfort the in Lords promises and His eternal word.
RIP Force.
You have done your bit to make this world a better place for all.
May you continue to shine in your new found life.
Long Live the Sprit of Dumza Dura Nguqu
Long Live the undying Spirit of Adaduma Wushekazi Cekwana