Finance Minister Enoch Godongwana and South African Revenue Service (Sars) Commissioner Edward Kieswetter have announced new limits for tax claims for meals and accommodation and the rate per kilometre allowed for travel. The limits apply from 1 March 2023.
Click here to download the new rate-per-kilometre schedule that may be used in determining the allowable deduction for business travel against an allowance or advance where actual costs are not claimed. The prescribed rate per kilometre used for a reimbursive travel allowance for 2023/24 has increased from R4.18 to R4.64.
In respect of subsistence allowances, the following amounts are deemed to be expended for each day or part of a day in the period during which an employee is absent from his or her usual place of residence: incidental costs only, R161 a day (up from R152); or meals and incidental costs, R522 a day (R493 previously). Click here to download the Sars notice.
Sars has updated its guide for employers in respect of allowances. Click here to download it.
SA will be on the grey list for longer than a year, says FirstRand CE
Finance Minister Enoch Godongwana is too optimistic in predicting that South Africa will be removed from the Financial Action Task Force’s grey list by mid-2024, Business Day reports, citing FirstRand chief executive Alan Pullinger, who says the country faces two to three years on the list.
“It’s not going to be a year. I’m going to say it’s two to three years,” Pullinger told Business Day. “I don’t think it’s one year, even if we had to pull out all the stops, which I don’t think we’ll be able to do.”
James George, a manager at Compli-Serve SA, also believes Godongwana’s one-year prediction is too optimistic. “Unless the government and private sector really work hard together, it could take as long as five years. For me, we are looking at three to five years as things stand.”
Full Business Day report (subscription required)
Grey-listing and load shedding ‘are eroding SA’s status’
Nedbank chief executive Mike Brown says South Africa is facing the steady erosion of its status as an investment destination amid the prospect of years of being grey-listed, as well as more load shedding, News24 reports.
In Brown’s view, although there have been many encouraging developments recently – such as the appointment of an electricity minister, the government is not moving fast enough.
He said the government has not done enough to clean up South Africa’s image on the money laundering and financial crimes front. When it became apparent that South Africa could be grey-listed, the international banks that Nedbank works with told the firm that they had long been treating South Africa as a high-risk environment, effectively requiring the bank to comply with the Financial Action Task Force’s standards, even before the country joined the grey list.
“I think lots of people do an extraordinary amount of work in the last two years to try and avert a grey-listing … but that was too late. All the legislation that got passed through Parliament, it’s not in use at the moment. I don’t think that we are moving fast enough. Otherwise, we would not have been grey-listed,” Brown was quoted saying.
Full News24 report (subscription required)
Fund manager pleads not guilty to rand manipulation
Neil Phillips, the co-founder and former chief investment officer of hedge fund Glen Point Capital, has pleaded not guilty to currency manipulation, according to court documents.
The United States Attorney’s Office in New York charged Phillips with manipulating the US dollar/rand exchange rate to trigger a $20 million payment under an options contract. He was arrested in Spain last year at the request of US authorities. Phillips has since been charged with orchestrating a separate $10m pay-out on another contract. He will go on trial in October after being released on a $15m personal bond.
Under the terms of the option, if the dollar/rand exchange rate went below 12.50 at any point before January 2, 2018, the hedge fund would be entitled to a $20m payment. According to the indictment, on 18 December 2017, the dollar/rand exchange rate dropped to as low as R12.52 on the news that Cyril Ramaphosa had been elected to replace Jacob Zuma as leader of the ANC.
On 26 December 2017, with the option set to expire in a matter of days without having been triggered, Phillips engaged in a scheme to manipulate the rand/dollar rate to drive it below 12.50, the US Attorney’s Office alleges.
Read: US charges hedge fund’s CIO with manipulating dollar/rand exchange rate to trigger $20m payment
