News in South Africa 23rd December:
1. Second wave in SA reaching inland:
Much of the coronavirus focus is on coastal regions right now. But Gauteng has the highest cumulative Covid-19 caseload in South Africa and – even before holidaymakers return from the coast – at least 20 wards have been identified as developing hotspots, with clusters in Johannesburg, Randburg, Krugersdorp, and Pretoria.
Combining data gathered from the localised risk index with early indicators of the virus’ exponential growth, Wits University has developed a digital dashboard which aims to flag developing hotspots. The index of severity, crafted by the university’s Institute for Collider Particle Physics (ICPP) in collaboration with IBM, is intended to allow government to intensify testing and tracing in these high-risk areas.
On Monday, 21 December, Gauteng accounted for 18% of all new coronavirus cases registered nationally, with an active caseload that increased by more than 60% in the week after the announcement of tightened restrictions.
Sandton Ward 103, covering Sandown, River Club, Morningside, Benmore Gardens, and Bryanston is considered a certified hotspot with over 200 active cases and a combined risk index rating of 32. Nearby Atholl Gardens, Wynberg, and Alexandra Ext 24 are listed as developing hotspots displaying exponential growth with a risk rating of 33.
Ward 99, which includes Linden, Robindale, Blairgowrie, and Robin Hills, is considered a particularly high-risk area, with an index rating of 47.
Ward 20, a confirmed hotspot consisting of Bedfordview and Saint Andrews, holds the highest risk rating in Johannesburg of 55, with more than 50 active cases reported in an area less than one square kilometre.
2. Petrol industry applies for competition exemption:
The South African Petroleum Industry Association has applied for exemptions to the nation’s competition rules in order to “prevent and mitigate supply emergencies,” according to a government notice.
The exemptions to the Competition Act would allow joint planning around the scheduled shutdown of refineries and coordinate reactions to unplanned outages by members including Total SE, Royal Dutch Shell Plc and Sasol Ltd., that own refineries in South Africa, Sapia, the industry lobby group, said in a Government Gazette notice published 21 December.
More than 40% of South Africa’s crude-oil refining capacity has been shut this year by accidents that occurred, including one at a Glencore Plc unit’s refinery in Cape Town and Petroliam Nasional Bhd.’s Engen refinery in Durban.
3. Covax down-payment finally made:
South Africa has finally made its down payment for the Covax vaccine programme, after missing the payment more than once, leading to public outcry.
Earlier this week Minister of Health Zweli Mkhize attributed the delays to administrative issues. South Africa has been battling with a second wave of Covid-19 cases, reporting 789 cases on Monday, bringing the total number of infections to 930 711 since the beginning of the outbreak.
On Tuesday the National Department of Health together with the Solidarity Fund announced the country’s down payment of R283 million to international vaccine alliance, Gavi. The payment is 15% of the vaccine programme’;s total cost and will enable 10% of South African (6 million people) to be vaccinated.
4. Major shift in taxation after pandemic:
The history of international taxation shows that tax tends to shift substantially after a major world event. The two world wars have been the most important catalysts for the development of international taxation, a recent report by Graphene Economics on cross-border tax notes.
In the report Keith Engel, CEO of the South African Institute of Tax Professionals (Sait), says that given the impact of Covid-19 on world economies, there is likely to be another shift in international taxation over the coming months and years.
“If we look back at the 2008 global financial crisis, it was only in 2013 that the OECD [Organisation for Economic Cooperation and Development] started formally working to address the significant issues of Beps [base erosion and profit shifting], so there was quite a lag. What is perhaps different now is that the OECD was already working on various policies prior to 2020,” says Engel.
He anticipates greater indebtedness by governments, with revenue authorities having to look for new “pockets” they can tax and potentially adopting more protectionist mentalities.
The report refers to the disruption of global supply chains and an increased focus on digital services taxes.
Globally, many countries have begun to look at localising supply chains and the OECD has had a keen eye on taxing the digital economy.
5. Hollard to pay business interruption claims:
Insurance Claims Africa (ICA) has welcomed the decision by Hollard and Guardrisk to pay claims from businesses forced to close during the national lockdown to stem the spread of the coronavirus.
This follows the recent Supreme Court of Appeal (SCA) ruling in favour of the business interruption claim made by Café Chameleon, a Guardrisk customer . On December 18, the company said it would abide by the ruling.
Ryan Woolley, CEO of ICA, said Hollard has since also agreed to start processing claims as long as the policies contained the appropriate and similar cover to the policy assessed by the SCA in the Café Chameleon case.
“However, Santam has refused to accept the outcome, arguing the cases are materially different,” he said.
The ICA said it represents more than 850 claimants in the tourism and hospitality sector in their battle to get large insurers to pay business interruption claims. Woolley said the effects of the pandemic were also affecting other sectors.