Jurgens Group at their Annual Staff Conference in Sedgefield

Estelle Susanna receiving the “Achiever of the Year Award         

presented by Mark and Greg                                                              

Nela Pereira receiving her 10 Year Long Service Award from Mark Jurgens

Good day to you all!

At our recent annual staff conference in Sedgefield, our theme for discussions and activities related to, amongst others, improving our levels of service, advancement in technology and upcoming legislative changes in our industry. The team building activity took place at a community and job creation centre, Masithandane which means, ‘let us love one another’. We enjoyed working alongside the mosaic crafters, mosaicing pavers which will form part of a colourful hopscotch court in the Sedgefield Mosaic Interactive Park.

The economic forecast for this year is expected to improve compared to last year – with the Rand /Dollar exchange rate likely to remain fairly stable, however, political stability is required. There are still some global economic issues on the horizon, which we need to keep in mind.

Elections in the Netherlands and in France could bring more surprises, in that the front-runners are wanting to exit the European Union. These events, with the unfolding of Bexit, could have serious repercussions to financial markets.

Time Magazine recently noted that the No. 1 risk of 2017, is having an “unpredictable America” under President Trump.

Having attended a number of investment presentations this year already, the sentiment of most portfolio managers is far more positive than seen in recent years.

Volatility in global markets can create opportunities, for example, the recent dramatic growth in American equities.

Moving back home, we have been blessed with significant rainfall over most of the country. Crop yields have increased and food inflation is expected to decrease. With overall inflation on a downward trend, we are hopeful of a possible decrease in interest rates in the latter part of the year.

As we head into Autumn, enjoy the burst of colours of the changing leaves and the crisp breeze – transformation and hope is in the air.

Regards,

Mark

Budget Highlights 2017 from Alan Botha

The SA economy finds itself in a protracted period for global trade, lower commodity prices and a higher risk of external volatility. The 2017 Budget proposals aim to tighten fiscal policy, drive radical transformation of economic models, with the aim of inclusive growth. The proposals below were put in place to fill a R28bn in SA’s current budget deficit.

Highlights of the budget include the following:

• A new top Personal Income Tax rate of 45% (previously 41%) for taxable incomes above R1.5m
• Increase in dividend withholding tax rate from 15% to 20%
• The highest effective capital gains tax (CGT) rate for individuals will increase from 16.4% to 18%.
• Tax threshold increase from R75 000 to R75 750
• Property transfer duty threshold increased from R750 000 to R900 000
• Tax free savings annual allowance increased to R33 000 per tax year (previously R30 000)
• Increase of 30 cents per litre in general fuel levy and 9 cents per litre in the road accident fund levy
• Increase of excise duties for alcohol and tobacco of between 6% to 10%
• Sugar tax proposal will be implemented later in 2017
• Proposed carbon tax and its implementation to be considered further

The jump to the new tax tier of 45% as an alternative to introducing a wealth tax, which our current financial systems and infrastructure are not geared for. The next significant contributor to the R28bn under collection problem is a huge 33% increase in the dividend withholding tax, which is expected to bring in R6.8bn in additional revenue. This represents an easy collection method for government, as tax is withheld by corporates when dividends are paid out, they are then obliged to pay this over to SARS within 30 days. This increase was effective immediately negating any quick decisions to declare dividends before month end (28 February 2017). This increase also keeps the top individual marginal tax rate in line with the combined effect of the company tax rate including withholding tax at 42.4% (previously 38.8%). Regarding the taxation of interest free loans to trusts, a deemed interest rate of 8% will now be applied from 1^st of March 2017. This interest component will then attract donations tax of 20%.

Taxpayers are however, able to utilize their annual individual donations tax exemption of R100 000 to offset this liability. In theory, only loans of more than R1 250 000 would attract tax, once the exemption described above has been catered for. A further proposal is aimed at extending anti-avoidance measures regarding interest free loans made to companies that are owned by trusts.

Further proposals in the future relating to retirement reform, refer to current legislation whereby persons of retirement age (age 55) are prohibited from transferring their funds to another approved retirement vehicle without being taxed. SARS is now looking to change this to ensure a person would only be taxed at the time of ‘’real’’ withdrawal. People are living and working longer, therefore a retiree should not be forced to retire from a fund, but able to elect to transfer tax free to another approved pension or provident fund.

Common consensus is that overall this was a sensible budget, and we emphasize that this article merely highlights some of the most pertinent points applicable to financial and business planning outcomes. Please contact our office directly, should you wish to discuss any of the proposals and how they may relate to your financial planning needs and objectives.

Short Term News Update from Greg Brits  

With all the recent wet weather we have had country-wide, we trust you are keeping dry and driving with caution. Its seems La Nina is in full swing as predicted by some analysts.  Its great news for our dams though as the Vaal Dam level is at 82% and increasing at the time of writing this article.

We have been looking at our stats on recoveries and thought it would be good to mention why some excesses are not recovered or why third party claims are abandoned. Unfortunately, the law is not being enforced by government for third party motor insurance, the cost factor being the reason given. If it were enforced, it would cost between R50 and R100 a month and would grow the risk pool of clients that are insured. It costs about R636 to fill up a vehicle with a 50 litre petrol tank, of which R239 is tax. Makes one think! One of the main reasons for non-recovery of accident related costs and excess payments, is that most people do not have insurance cover, some of whom, have no attachable assets to re-coup costs.

Other reasons for non-recovery is that information at the scene of an accident is often falsified. It is important to take photos of the licence disks, the drivers’ Licence, vehicle damage etc. This information is important as it enables Insurers to trace the third party.  At times in the event of an accident, the blame for the accident is shared and each party then covers their own claim / costs.  Some friendly reminders:

• For driving safety purposes, it is important to ensure that your tyres’ tread is within the legal limit. The legal minimum tread depth of tyres in South Africa is 1.6 mm across the central three-quarter width, and around the entire circumference.
• Please check that your Fire extinguishers are serviced annually.
• Should the outstanding balance owed to the bank for your vehicle be greater than the retail insured value, then a top up policy is recommended to cover the shortfall. This can either be done via your insurance policy or the car-finance provider.