BUDGET 2016/2017

With our currency still recovering from President Jacob Zuma’s hair-raising decision in December 2015 to replace Nhlanhla Nene with David van Rooyen, Pravin Gordan has come to the rescue as South Africa’s new Finance Minister. Gordhan succeeded Trevor Manuel as Minister of Finance in May 2009 and held this position until May 2014 when he was replaced by Nene.

Now, back at the helm, he faces a daunting challenge of steering the South African economy through some very turbulent waters. South Africa’s economic growth is consumption-lead, not production-lead. This means that
the problems in China have had a severe stagnating effect on our economy. The International Monetary Fund, Barclays Africa Group Ltd and Bank of America have all recently cut their economic growth forecasts for South Africa. Also concerning is the warning by rating agency Standard & Poor’s: any further policy mistakes by our government will trash South Africa’s credit rating.
With the weakening rand, plummeting commodity prices, the ongoing drought and escalating inflation, government finances are under tremendous pressure. Government expenditure continues to exceed revenue at an unsustainable level. On December 14 2015, Pravin Gordhan released a statement saying: “…We can have extra expenditure only if we raise extra revenue.’’

In the light of this, the main focus of the upcoming budget is likely to be on increasing tax collection and widening the tax base through:

  • Improved methods of tax collection
  • Introducing new taxes
  • Increasing existing taxes
  • Enhancing anti-avoidance measures.

Our economy desperately needs to be re-invigorated. It appears that Gordhan does recognise that fact that things need to be done very differently in order to deal with South Africa’s key challenges. As the world looks on with interest, South African’s wait with baited breath to see what big changes the upcoming budget will bring. Finance Minister Pravin Gordhan’s budget speech will be presented to Parliament on 24 February 2016 at 2pm.




The US space agency NASA recently confirmed that 2015 was the hottest year on record. With temperature changes largely driven by increased carbon dioxide and other greenhouse gas emissions into the atmosphere, the heat is now on for South Africa, the largest emitter in Africa, to reduce her carbon footprint.

Recognising the importance of cutting carbon emissions, the South African government has committed to a 34% reduction in greenhouse gas emissions by 2020 and a 42% reduction by 2025. Carbon tax is expected to be introduced as a way of achieving these ambitious targets. Carbon tax was initially due to be brought in from 1 January 2015. Faced with business opposition and needing more time to formulate coherent measures and get systems in place, the government postponed this till 1 January 2016.

On 2 November 2015, the government published a revised Carbon Tax Bill proposing:

  • A gradual introduction of carbon tax, first phase running from date of implementation up to 2020
  • An initial marginal carbon tax rate of R120/t of carbon dioxide equivalent (CO2-e) with the effective carbon tax rate varying between R6/t and R48/t CO2-e
  • Tax-free exemptions ranging between 60% and 95% of total emissions, implying that carbon tax would be imposed on only 5% to 40% of actual emissions up to 2020
  • Waste and land use sectors excluded from the tax base for phase 1
  • Carbon tax revenue to be ‘recycled’ through reduced electricity levies and tax incentives for energy efficiency savings

The final carbon tax rate, exemptions and actual date of implementation are still to be announced by the Finance Minister. With the Treasury under increasing pressure to find new ways of increasing tax revenue, carbon tax seems like an obvious way forward. Environmentally, this appears to be a critical time to introduce a carbon tax. Economically however, a carbon tax at this point could further damage South Africa’s already declining economy, costing jobs and investment. The implementation of a carbon tax is yet another challenge for our government and it will be interesting to see what happens when the 2016/2017 budget is announced next month.




Running a business is a journey – from time to time you need to look behind you to see where you have been and to make sure you are still going in the right direction. The beginning of the year is a good time to
review the past, learn from mistakes and develop new strategies and goals.
Some guidelines for your business journey in 2016:

  • Make business planning a weekly event so that you continually monitor progress , adjust old goals and set new directions for your business
  • Develop your marketing strategy and make use of digital marketing to enhance your marketing efforts in a measurable and cost effective way
  • Make your business more competitive through improved marketing, clever product branding and streamlined pricing
  • Allow time to review monthly management accounts and profit margins and use the information to keep on track
  • Communicate with staff through regular meetings which create a platform for voicing opinions, sharing ideas and contributing positively
  • Conduct regular employee performance reviews where your feedback encourages employees to improve their performance and to give of their best going forward
  • Delegate sensibly and involve staff so that you can focus on leading and growing your business
  • Be critical of your customer service and make excellent customer service a priority
  • Update or implement your social media strategy using platforms like Twitter, LinkedIn, YouTube and Pinterest which enable you to network, develop fresh ideas and new contacts
  • Maximise the use of technology in your business to save time and run more efficiently e.g. install relevant mobile apps to make it easier to operate efficiently in the field
  • Make sure your data is protected. Cybersecurity threats and identity theft risks are escalating so be pro-active to minimise the risks
  • Protect your business from fraud by implementing a written, easily understood code of ethics which staff and contractors sign up to

By following these guidelines and continually assessing your business performance throughout the year, you will be able to motivate staff and steer your business towards success in 2016.




During the festive season, criminals take advantage of the fact that people let their guard down, so it important at this time of year to check bank statements extra carefully. Card skimming is a major global problem which is escalating because of advances in technology and the fact that skimming devices and blank ATM cards are cheap and widely available on the black market. Card skimmers illegally collect data from the magnetic stripe of bank cards and this information is copied to create ‘cloned cards’ which are then used to make purchases or cash withdrawals in the account holder’s name.
Technological improvements have made it easier and less risky for fraudsters to operate. Hitech skimming devices are much smaller and thinner with improved battery life so they can be fitted inside card reader slots remain in place for longer. Data can now be remotely retrieved using Bluetooth wireless technology. SMS card skimmers automatically and instantly send messages with stolen data worldwide, making this an attractive incentive for criminal networks. Instead of hidden cameras, thermal imaging technology is being used to decipher PIN numbers. Smartphones make this very easy – all that is needed is a thermal imaging attachment which reads the thermal signature left behind when a PIN is entered.
Tips to avoid card skimming:

  • Avoid ATM’s in quiet or badly lit areas
  • Where possible, use the same ATM so that you become familiar with it and recognise changes
  • Be vigilant: Skimmers are small and resemble part of the ATM but may be loose or a slightly different colour
  • Never use an ATM which has been tampered with
  • Never accept help from strangers at an ATM
  • Report confiscated cards immediately without leaving the ATM – phone the official bank helpline number (beware of extra signage or warnings posted on the machine)
  • Always hide the keypad with your hand when entering your PIN
  • Monitor your account activity using online and mobile banking
  • Never let your card out of sight – if the cashier ‘cleans’ your card on clothing or moves it below counter height they may be skimming your card