News in South Africa 25th July:
1. No break for taxpayers:
More than 30 tax offices across the country remained closed on Thursday (21 July), with the South African Revenue Service (Sars) acknowledging delays in servicing taxpayers due to the strike by its unionised workers.
Despite admitting delays, Sars says it does not envisage changing tax season submission deadlines at this stage.
“Taxpayers have had access to all our digital channels to file returns during the strike,” it said in response to Moneyweb questions.
Provisional taxpayers must file their first estimation for the 2023 tax year and make a payment by the end of August. Non-provisional taxpayers must file their annual returns by 24 October.
Delays with appointments
Tax practitioners and taxpayers have experienced delays in virtual appointments with Sars officials, sometimes waiting more than two hours before being able to make contact.
Sars says it has been transparent about the fact that the strike could impact appointment bookings. “However, we have committed to honouring all bookings – even if they are sometimes slightly delayed,” it adds.
The South African Reserve Bank raised its key repo rate by 75 basis points on the heels of a higher-than-expected June headline inflation figure of 7.4%. This will most probably further fuel workers’ demands for higher wage increases.
2. Load shedding returns:
Power utility Eskom has warned that it may be forced to re-introduce load shedding at short notice after five of its generating units tripped on Monday morning.
The group said that load shedding may have to be introduced if it loses any more generating capacity.
The units, which tripped in the early hours of Monday morning, took 2,000MW of capacity off the network.
“While some generation units at other power stations are expected to return to service during the day, these will take time to load to full capacity,” it said.
“Should there be any further loss of generation capacity during the day, or some units fail to return to service as anticipated, load shedding may be required to be implemented at short notice.”
South Africans have suffered through more than five weeks of continuous load shedding, with stages hitting as high as stage 6. The outages were primarily driven by illegal strikes at its power stations as workers demanded higher wages.
After the strikes ended, the power utility used daily load shedding at various stages to rebuild capacity. Load shedding was suspended earlier than anticipated on Saturday (23 July).
The country is waiting on president Cyril Ramaphosa to announce a promised ‘package’ of interventions to help alleviate the country’s power crisis.
3. Crackdown on illegal foreigners:
Over 50 contravention notices were issued and 11 undocumented foreign workers arrested in a week-long blitz on the road freight sector in Potchefstroom, North West, the Department of Employment and Labour has said.
The crackdown, which wrapped up this week, is part of a series of so-called ‘mega blitz’ inspections the department is carrying out across the country to ensure compliance with labour laws. According to government, the manufacturing sector will be up next.
The road freight blitz was a joint effort between the Department of Home Affairs (DHA), the South African Police Service (SAPS), and the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI).
A spokesperson for the Department of Employment and Labour said among some 180 employers who were inspected, the 50 notices issued included a range of offences from underpayment to illegal deductions, safety violations, and the hiring of undocumented workers. One of the employers risked employees’ lives with a violation of the Occupational Health and Safety Act’s regulations on electrical installations, said Inspector General Aggy Moiloa.
‘Most’ employers underpaying
“What we discovered during these inspections is that most employers are underpaying their employees, making illegal deductions, and failing to provide their employees with payslips and employment contracts.
“We have since issued them with contravention notices, and we expect them to correct this within the time frames specified,” said Moiloa.
Earlier in the week, four undocumented foreign nationals were arrested at a roadblock along the busy N12 route. This followed the arrest of seven others on Wednesday at a local company.
All are due to appear in the Potchefstroom Magistrate’s Court.
While it was the workers who were arrested, Employment and Labour Minister Thulas Nxesi said employers who hired undocumented workers would “face the music”.
4. VAT hike possible:
A new report by Intellidex and South African business groups says that the ‘least bad’ option to fund a basic income grant in South Africa would be through another VAT hike, with the authors suggesting that 17% would be the figure needed.
Hiking VAT stood out as the least fractious revenue raiser for a basic income grant (BIG) in a new study commissioned by SA’s most prominent business lobby groups as they weigh in on a proposal that has polarised economists and policymakers.
The 64-page report, conducted by research house Intellidex on behalf of Business Unity SA (Busa) and Business Leadership SA (BLSA), is the latest to make a forceful contribution on the proposal, which has become a recurring feature of welfare debates after the July 2021 protests morphed into a violent outpouring of anger over hardship, record high unemployment and inequality.
This would add another R50 billion to the fiscus, which would be enough to support the grant.
Economists and analysts widely accept that a basic income grant will become a reality in South Africa, but the debate on funding rages on.
5. Illegal donkey trade:
A traditional medicine known as ejiao in China is spurring the illegal trade of donkey skins in South Africa and, possibly Lesotho, threatening the donkey population and causing a spike in theft.
Donkeys are stolen, inspector Keshvi Nair and public relations officer at the National Council of SPCAs told Business Insider South Africa, and typically transported to KwaZulu-Natal. From there, they are smuggled through the mountains into Lesotho.
According to The Donkey Sanctuary, a donkey welfare organisation in the UK advocating for their welfare, donkey hide glue is produced from the collagen of the animal’s skin and is used as a critical ingredient in the production of traditional Chinese medicines.
Nair said the National Council of Societies for the Prevention of Cruelty to Animals (NSPCA) currently has seven active cases relating to the illegal donkey skin trade, with the most recent involving 100 donkeys that were saved from being smuggled in March 2021.
The society is particularly concerned that the animals are usually not stunned to unconsciousness prior to slaughtering, as required by law.
During inspections in villages and communities where donkeys are prevalent, the NSPCA has found fewer donkeys on each visit.
While the slaughter of equines for human consumption for their hides is legal, it can only be done at registered abattoirs, of which South Africa only has two, which also generally have a low slaughter rate.
“For the number of skins that are found or that are leaving our borders it is safe to say that it is being done illegally,” said Nair.