Dear Subscriber,

Yesterday I got my first Christmas card from a client, our staff year end party is in the next week and soon we will all be embroiled in running around to a few client functions before the year comes to an end. The silly season is officially here!! And for some this means that business is slowly winding down.

In a marketing email I read by Vibrant Media, they stated that South Africa is expected to record sales growth of 10.5% in December, almost R8.9 billion more than in 2006. Research shows that Christmas retail spending is not only limited to gifts for others, but that many consumers use this time and money to splurge on themselves.

In a recent article titled “Stealthy VAT takes billions for governments” by Sanchia Temkin , Peter Jenkins, global head of indirect taxes at Ernst & Young states that VALUE added tax (VAT) is an indirect tax and therefore often overlooked, but it is one of the most important sources of revenue for governments worldwide.

VAT is used to raise revenue without increasing direct taxes such as income taxes. Ernst & Young´s research found the average regional VAT rate in Africa is 14,5%, which is still lower than the average worldwide rate, Jenkins says. South Africa has an average VAT rate of 14%. SA´s VAT is still below the worldwide average rate of 16,4%. “In spite of the small victories for consumers, the VAT rate is still soaring globally,” Jenkins says.

Could this possibly explain South Africa´s excessive spending in the “silly season”?

Till next week.
Janine Connor
Executive Editor & Head of TAXtalk

TAXtalk Magazine Article

Transfer pricing is still a relatively new concept in South Africa. At a recent seminar held to discuss the various issues surrounding Transfer Pricing, Joseph Rock, head of the SARS Transfer Pricing desk answered many questions and tried to provide insight as to how the revenue service views transfer pricing. To many people, including professionals in the field, transfer pricing may still be a grey area.

Grant Lloyd of Softline Pastel Payroll - Summit TV

Annual leave payments and bonus payments are governed by the Basic Conditions of Employment Act (BCEA). This issue was discussed by Grant Lloyd of Softline Pastel Payroll on Tax Issues, broadcast on Summit TV.

eTaxjobs is a global job portal exclusively for tax professionals, and an online resource for employers and recruitment firms to advertise their vacancies. eTaxjobs operate in the UK, Europe, USA, Canada, Australia, New Zealand, Africa and around the World.

Available tax jobs for this week are:

Brett Scott - Chief Investment Officer - The Perfect-Portfolio

I read an interesting article in the New York Times the other day by columnist David Brooks (NYT 9 October 2007) and it made me think a bit. Brooks stated that conventional (and outdated) thought was that there used to be four common life phases: Childhood, Adolescence, Adulthood and Old Age. Contemporary thought, however, professes that there are at least six: Childhood, Adolescence, Odyssey, Adulthood, Active Retirement and Old Age.

SARS internet Notification

This document is a general guide dealing with the tax exemption of Public Benefit Organisations in South Africa. Although fairly comprehensive it does not deal with all the legal detail associated with the exemption of Public Benefit Organisations.

This exclusive Seminar will include presentations from respected tax experts from around the country and abroad and include discussion on:

• Formal introduction of SAIT as a professional Institute in South Africa.
• Feedback from local tax practitioners on the draft Bill.
• Update on the developments surrounding the draft ‘Regulating of Tax Practitioners Bill’.
• Presentation by Taxation Institute of Australia on international best practice for regulating tax practitioners.
• Potential impact of the new legislation on accountants and tax professionals.
• Info session on the new SARS e-filing.
• Tax update presented by Professors Jackie Arendse and Lynette Olivier.
• Presentation on ‘7 Habitual Tax Mistakes’ made by companies.

FNB Press Release

Considering the positive economic impact on the host countries during the Sydney Olympics and Germany´s football World Cup, South Africa is likely to experience a great boom as a result of the 2010 FIFA World Cup. Already, construction and tourism are benefiting from the build-up to the event, with infrastructure development projects and new accommodation establishments constantly springing up.

TAXtalk invites you to write an article in which you share your views and expertise on tax. Your article can be published in the newsletter for 7000 readers to view, on our website for over 100 000 viewers to see and in the TAXtalk magazine(with your photo) for more than 16 000 readers to read. Make an impression, submit your article NOW.

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