Newsletter September 2010 Filing period for Interim PAYE Reconciliation for Employers begins Pretoria, 1 September 2010 – Today marks the beginning of the Interim process for Pay-As-You-Earn (PAYE) reconciliations for the country’s employers, which is the first step in registering all employees in the formal sector for income tax, as announced earlier this year by the Minister of Finance Mr Pravin Gordhan, in the 2010 Budget. The new Interim PAYE reconciliation process for employers from 1 September to the end of October will become an important part of the annual Tax Season. Employers are required to submit two PAYE reconciliations of their payroll to SARS each year. The first submission by employers is an interim reconciliation for the period 1 March to 31 August, with a deadline of 29 October 2010. The second submission is the annual final reconciliation for the full tax year for the period 1 March to the end February. The deadline for this submission by employers is 31 May 2011. The interim reconciliation process is exactly the same as the annual reconciliation declaration except that the declaration and employee Income Tax certificates are in respect of six months only. Employers should note that interim tax certificates (IRP5s) should not be issued to employees as they are for SARS’s administrative purposes only. Employees must still receive only the one tax certificate at the end of the final annual reconciliation. Another important change is the mandatory requirement to furnish employee demographic information. The following employee information is required for the interim reconciliation: • Initials, first two names and surname • ID number or passport number and country of issue (where no SA ID is available) • Date of birth • E-mail address where available • Business, cell, home telephone numbers and fax numbers where available • Physical business, postal and residential address where available • Directive numbers where available • Bank account details of the employee This information is critical in fulfilling SARS’s long-term vision for a world-class tax administration system which relies on accurate information in order to ensure compliance by everyone. It is also mandatory for employers to include Income Tax reference numbers for employees who are registered for income tax for the interim reconciliation. If an employee is not registered for Income Tax and hence does not have an Income Tax reference number, the information field should be left blank. SARS will automatically register the employee when processing the reconciliation submission. Being registered, however, does not necessarily mean taxpayers will be required to submit returns. Employees who earn less than R120 000 (before tax) for a full year from one employer and have no car allowance, additional income or deductions that they want to claim for, do not need to submit a tax return to SARS. In order to assist employers, payroll administrators and practitioners to meet these new obligations, SARS has released an updated and improved version of e@syFile Employer. The free software package, which is available for download from www.sarsefiling.co.za, interfaces with payroll systems allowing employers to import the information from their payroll systems and quickly and easily submit this electronically to SARS. Instructions on how to make an electronic submission or a manual submission are available on www.sarsefiling.co.za. GREEN TAX FOR BUSINESSES South Africa promotes carbon markets after abandoning carbon levy on coal power For years the principal objection of South African business leaders to the introduction of green taxes was that they would be just another tax, raising the cost of business, without curbing polluters or benefiting the environment. Now the South African Government has followed international trends and proposes tax incentives to curb climate change through the carbon markets and energy efficiency measures. In the draft Taxation Laws Amendment Bill 2009, an income tax incentive is proposed for any business that takes part in a UN Clean Development Mechanism (CDM) project. The incentive applies to the sale of carbon credits and would exempt the revenue from that sale from income tax. In addition, the amendments open the way for businesses to obtain ‘notional deductions for income tax purposes for energy efficiency savings from certified baselines based on energy efficiency certificates issued by the National Energy Efficiency Agency. In other words investments in energy efficiency would become tax deductible provided an audited baseline had been certified for the company’s energy usage prior to the investment being made. The agency designated to provide these certifications – the Energy Efficiency Agency – already exists but has capacity issues. With this move South Africa would be following international trends and could potentially help increase the number of CDM projects registered in Africa and South Africa to date. John Ledger, Chairman of the Sustainable Energy Society of South Africa welcomed the proposed changes. However the key reasons for Africa’s and South Africa’s limited number of CDM projects is are capacity constraints at the Designated National Authority, the national body responsible for coordinating CDM/JI projects, as well as the high upfront costs associated with the registration and certification process for CDM projects. These costs limit the viability of all but the larger CDM projects and are the reason that few smaller projects have been registered to date. The value of the proposed exemption of carbon credits is likely to have a small impact on the state’s revenue, and the move comes in the context of the Government’s decision to delay the implementation of the environmental levy of 2 cents per kWh on electricity generated from non-renewable resources (i.e. most of Eskom’s electricity) by a year. Nevertheless, South Africa is no stranger to the concept of environmental taxes; in 2003 years of lobbying of then Environment and Tourism Minister, Valli Moosa, led to the imposition of a levy on most types of plastic shopping bags. Despite opposition from unions who feared massive job losses in the plastics sector, the measure proved effective, leading to a drastic reduction in plastic refuse and a series of cottage industries, sponsored by retailers, to produce re-useable bags. For some years, the treasury has also investigated opportunities to provide better tax write-offs for environmental research and development but so far nothing has come of it. As early as the mid-1990s the Department of Environmental Affairs and Tourism with the help of British consultants investigated a whole range of ‘economic instruments’ as a means of promoting cleaner production but the time was not deemed right. The same Treasury that is seeking to use tax relief to incentivise South African companies to invest in CDM projects is funding the massive capital expenditure programme of the state-owned utility Eskom, the largest emitter of greenhouse gases on the continent. Eskom, despite many public pronouncements to the contrary, is focusing 99% of its capacity expansion efforts on coal. This comes despite Government commitments to curb emissions by 2020 and reduce them thereafter. South Africa's greenhouse-gas emissions rank in the top 20 in the world, contribute 1.8% to global emissions and are responsible for 42% of Africa's emissions. With the newly-appointed Minister of the Environment also being an ardent pro-mining promoter, the motives behind the South Africa Government's overall approach to using economic instruments to promote greener behaviour and business may be brought into question GREEN TAX ON ALL CARS Johannesburg - Though it will not be implemented this year, the government is considering slapping a carbon dioxide (CO2) vehicle emissions tax on all cars - new and old, Finance Minister Pravin Gordhan said. This will be implemented by reviewing the approach to vehicle licence fees, which are implemented by provinces, he told parliament. "As we improve our public transport, we could also impose higher fuel levies and demand better quality fuel. All in all, there is a place for all these mechanisms if we want to reduce the emission of greenhouse gases and ensure that we leave our children with a better legacy when it comes to air quality and reducing the risks of climate change," Gordhan said. This tax will be imposed in terms of amended schedules and rules to the Customs and Excise Act. "As with other tax proposals, we have consulted with relevant stakeholders, including the motor car industry. After some initial misunderstanding, I met with the largest motor car industry CEOs last week, and confirmed that the CO2 vehicle emissions tax on passenger cars will proceed as scheduled on September 1 2010. "However, I have also taken into account some concerns of the industry, and agreed that the tax on double cabs will be delayed slightly, and come into effect on another date in the next few months. This tax will be extended to all other light commercial vehicles at a later date," Gordhan said. "I should add that we do have a comprehensive approach to the environmental taxes. Work in this area began in 2003, including a paper on environmental fiscal reform published in 2006 and the discussion paper on carbon taxes that will be published shortly," he added Data Integrity and Data Corruption PASTEL - How does Data become corrupt? Data is stored in databases which in simple terms are structured tables of data. Pastel Partner is made up of 98 different tables. Depending on your settings in Pastel, one single invoice with one item line will update the following tables: GL Transactions (Every Debit and Credit about 5 records) History Lines (One record per body line no matter if item,gl or remarks) History Header (One record per document) Open Item (One record for future receipt allocation) Multi Store Transaction (Updates Qty and costs by Store) Inventory Master (Updates Item Record) Customer Master (Updates Customer Period Column by invoice Value) GL Master (Updates up to 5 GL Accounts Period Column Amount) History User Defined (If User defined Fields where used add records) GL Parameter (Next Invoice Number Update) So while a user is updating this one single invoice and one or all the following occurs Power Failure Network Error PC Freezes or reboots User reboots PC when not finished. Cable error in a network. Unable to connect to Server where data is residing. And many more reasons that could stop the above tables to all be updated. Then not all the tables have being updated, you will have discrepancies between different reports. Some of the above tables have a financial implication in terms of your Trial Balance that is suppose to balance. From an accounting point of view one needs a debit for every credit and a credit for every debit which mathematically means the following: The GL Transaction file that keeps a record of every Debit and Credit needs to equal to ZERO. Not only must the whole table equal zero but also by period as one invoice for let’s say R114.00 Including VAT with a known cost of R50.00 for the item that is being invoiced would create the following GL transactions. GL Acc Description IS or BS Debit Credit Amount Sales / Income IS R 100.00 R -100.00 COS (Cost of Sale) IS R 50.00 R 50.00 R - Debtors Control Account BS R 114.00 R 114.00 Inventory Control Account BS R 50.00 R -50.00 VAT Control Account BS R 14.00 R -14.00 Totals R 164.00 R 164.00 R - If one of these Lines or GL Transactions are not present in the GL Transaction table then the table will be out of balance. Now Pastel is able to do some simple mathematical calculations to see if one balances or not by doing the following. The above would equal to ZERO by the entry type sales and by the period the invoice is done in. ADD the GL Transaction (Must equal zero) Add the GL Transaction by Period (Must also equal zero) Add the GL Transaction by period and by entry type (Must also equal zero) Then Compare the GL total by each GL Account, Debtor and Creditor and these totals must match the GL, Debtor and Creditor master movement amount by each period of the last two years. Then It also adds the Open Items of each Customer and Supplier that are open item to see if this matches the currency balance in each master file. The above checks are only really from a financial aspect to see if your data has gone corrupt or not. There is a small check to see if any history lines and headers are missing but these are a simple "if a history line exists then a history header with same document number should exist". There is not financial check to see if History and Item stock related files have gone corrupt. So backups are still the best solution to go back to, to be 100% sure of your data. The stock fix updates all data in your Multi Store Transaction file using the History lines file to update quantity, average prices etc. and if the History Lines file has missing data then the Stock Fix will also create unreliable data. Most data fixes will do one thing only and that is balance the GL Transaction file or updates the totals in the Master files if the GL Transaction file balances. The fact that maybe 10 Invoices are missing or partly posted and should have 10 x records in the Sales GL Account, a data fix will usually create 1 NEW Sales Record of the total amount missing. Also be aware that all the non-Financial Tables are updated (So you can do a sale by item report and see all 10 invoices) but all the GL and financial tables including Master Files are not updated. This will cause a data integrity report to not show any problems, even though you have the financials of 10 invoices missing from the Financial Section. Goeie Lewensnotas • Die beste manier om iemand terug te kry, is om te vergewe. • Voed jou geloof en jou twyfel sal sterf van die honger. • Tensy jy die HELE skepping kan skep in 5 dae, is dit miskien nie so 'n goeie idee om vir God te probeer voorskryf nie. • Suksesvolle huwelike is nie om die regte persoon te vind nie, maar om die regte persoon te wees. • Woede is 'n toestand waar die tong vinniger werk as die verstand. • Alle mense glimlag in dieselfde taal. • Almal verdien om bemin te word … veral die wat dit nie verdien nie. • Die werklike maatstaf vir 'n man se rykdom, is wat hy belê het in die lewe hierna. • Elke mens het skoonheid, maar nie almal sien dit raak nie. • Om uit die moeilikheid te kom, moet 'n mens gewoonlik daardeur. • Liefde is die enigste ding wat verdeel kan word sonder dat dit minder word. • Maak tyd om te lag, want dit is die musiek van die siel. Chené Johnson Wat is die slaap? 'n Wonderlike ding… n Goeie nagrus is vir ons almal noodsaaklik. Sonder genoeg slaap voel 'n mens prikkelbaar, moeg en lelik. Slaap is 'n vernuwer van gees en liggaam en dis miskien waarom baie van klassieke skoonhede van die wêreld hulle stralende voorkoms aan genoeg slaap toeskryf. So maak mens: ☺ Bestee soveel soos jy kan aan 'n lekker ferm, nie te harde matras, 'n bed met 'n stewige basis, goeie kussings en ligte, warm kombers. ☺ Sorg dat jy nooit te koud of te warm kry nie. ☺ Vermy stumileerders soos tee, koffie of alkohol voor jy gaan slaap. ☺ Die beste slaap middel bly 'n moeë liggaam. Genoeg oefening of werk in die tuin kan baie help dat jy rustig slaap. ☺ Doen 'n paar asemhalingsoefeninge voor 'n oop venster - trek jou asem diep in en blaas dit drie keer stadiger uit terwyl jy jou kop vorentoe laat val. ☺ Reinig en voed die vel en gebruik 'n oogspelmiddel as jou oë dikwels in die oggend geswel is. ☺ Neem 'n tydsame, warm bad. ☺ Vermy styf passende of wye nagklere wat om jou lyf draai en jou bewegings beperk. ☺ Koue voete deug nie. Sorg dat jy die bloedsomloop bevorder deur jou voete beurtelings in warm en koue water te baai. Skaf 'n paas snoesige bedsokkies aan. ☺ n Vaste bed toe gaan roetine, 'n warm melk drankie of lees en rustige musiek dra by om jou spoedig te laat slaap. ☺ Moenie lê en rondrol as jy in die nag wakker word en nie weer kan slaap nie. Maak vir jou 'n melk drankie en lees vêrder. ☺ Skape tel is doeltreffend. Interessant is die volgende waarnemings wat gedoen is: Mans slaap meer as vroue - gemiddeld 10 minute langer. Hoe ouer hulle word hoe groter is die gaping. Mans wat oor die 50 is slaap 20 minute langer as vroue en as hulle ouer as 70 is, 50 minute langer! Die gemiddelde nagrus van die meeste mense is 7uur en 36 minute. Mense wat ouer as 50 is slaap 5% minder as mense in hul 20ger jare. Na hul 60ste verjaarsdag slaap hulle egter meer as in enige tyd in hulle kinderjare. Lastly we would like to wish all our audit clerks the best with their examinations which recently started, as well as the examinations to come.. We have the fullest confidence in you!!
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