President Obama's plan to raise capital gains taxes will drive investment offshore

English: President Barack Obama gives his Stat...

In his State of the Union Address, President Obama barely touched on the country’s soon-to-be $16 trillion national debt, massive joblessness, entitlement insolvency, economy-crippling government regulations and the other compelling issues (“Obama targets economy, taxes in address,” Jan. 25).

Sounding like an Occupy Wall Street interviewee, he once again attributed virtually all of the country’s ills to the supposed failure of “millionaires and billionaires” to pay their “fair share.” Specifically, he is troubled that those with the greatest income pay only a 15 percent tax rate on their long-term capital gains and proposes that their rate be doubled to 30 percent.

The president’s position is as fatuous as it is incoherent.

via President Obama’s plan to raise capital gains taxes will drive investment offshore – baltimoresun.com

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SA business growth choked by rules and red tape

Singapore Chinese Chamber of Commerce & Indust...

OVERREGULATION and red tape are the biggest constraints to business expansion in SA, according to a survey by accounting, audit and advisory firm Grant Thornton.

The survey was based on the views of CEOs, chairmen and business owners in the fourth quarter of last year.Red tape was now as pervasive a problem in SA as in other Brics Brazil, Russia, India, China and SA countries, Grant Thornton Durban managing partner Deepak Nagar said yesterday.

The survey found 37% of privately held business owners in SA cited red tape as their chief constraint, followed by a lack of a skilled workforce, at 36%.

Durban Chamber of Commerce and Industry CEO Andrew Layman said the results were “spot on” and SA’s regulatory environment, for small businesses in particular, needed to be reviewed.

The increasing complexity of regulations such as additional tax or governance requirements, labour issues, black economic empowerment, the time taken to register companies or change directors’ names was stunting the growth of business, Mr Layman said.

The second-biggest constraint to business globally was reduced demand for products — the effect of economic problems in the US and Europe. In SA, the second-biggest constraint to business was a shortage of skilled staff, said Mr Nagar.

Keith Brebnor, CE of the Johannesburg Chamber of Commerce and Industry, said it had become “very intimidating” for young people to start a small business in SA because of the onerous regulatory environment. Dealing with crime and a lack of skills also added significantly to the cost of doing business in SA, he said.

via BusinessDay – SA business growth ‘choked by rules and red tape’

SARS tax amendment for ownership of secondary properties

Tax

Last year South African Revenue Services introduced a tax amnesty covering capital gains tax, transfer duty and secondary tax for all natural persons South African citizens willing to transfer property owned by them in a company, a trust or a close corporation into their own names.The amnesty, it was made clear, would expire in December 2012.

This “enlightened” measure, says Tony Clarke, MD of Rawson Properties, was hailed by the property sector as a breakthrough because the capital gains tax on companies 15% was high and on trusts higher still 20%, whereas by contrast individuals usually pay only ±10% and more importantly are exempt of tax on the first R1,5 million capital gain.

However, there was one major snag: the exemption applied only to property in which the owner “ordinarily resided”, i.e. his primary residence. Second homes, holiday homes, investment properties and the like initially could not be transferred to individual ownership without paying in full the taxes referred to.Now, however, that has all changed. The recently promulgated Tax Laws Amendment Bill allows secondary residential properties to benefit from the amnesty in the same way as primary properties – provided the transfer is set in motion, i.e. not necessarily completed – by December 2012.

Clarke said that there will still be cases in which it might be preferable to hold the property in a company or other legal entity.  He pointed out, too, that the conveyancer’s fee would remain payable.Nevertheless, he said, the vast majority of property owners stand to gain significant tax benefits if they make use of the amnesty before it expires and he advised them strongly to do so.

via SARS tax amendment for ownership of secondary properties – SA Commercial Prop News | Commercial Property News in South Africa

Sars nails security boss for R2.2m

border|22x20px South Africa, Durban beach

A former Durban police detective, who now owns a security company, is facing a tax fraud, alternatively tax evasion, charge for just over R2.2 million after a company audit by the SA Receiver of Revenue.

Sandile Nkabinde, 37, who is now wheelchair-bound, appeared briefly in the Durban Magistrate’s Court on Wednesday. Nkabinde and his close corporation, Inside Edge, which trades under the name Sandile Security Services, have been charged for tax fraud.

According to the charge sheet, Nkabinde is listed as the sole member of the company that is registered as a value-added tax vendor. The state alleges that Nkabinde intended to defraud Sars by submitting false VAT returns on behalf of his company for the period June 2006 to February 2010, causing Sars to suffer a prejudice of just over R2.2 million.

The security company had a contract with the Mangosuthu University of Technology, in Umlazi, during this time.

According to Nkabinde’s LinkedIn profile, he was a detective with the South African Police for 11 years. During this time as a detective, it said, he led a team of detectives that was responsible for investigating police killings in Durban. He was also part of a team that investigated the political killings in Richmond.

His company was listed as providing a service to various government departments, specialising in physical guarding, special events, bodyguarding, skilled investigators and includes former guerrilla freedom fighters.

Nkabinde is also listed as being a chairman of a non-governmental organisation that helps raise funds for paraplegics and quadraplegics.

State advocate Selvan Govender requested an adjournment for representations to be made, and Nkabinde will again appear on February 28.

via Sars nails security boss for R2.2m – Daily News | News | IOL.co.za.

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School-leavers would gain more employment if SA labour law was amended

Labour law concerns the inequality of bargaini...

Businesses have long been calling for amendments to the labour legislation to assist in the recruitment and dismissal of workers. According to Johan Botes, Director in Employment at Cliffe Dekker Hofmeyr business law firm, a critical re-think of South African employment law might  assist in motivating especially small businesses to reconsider their reluctance in employing inexperienced job applicants.“Presently, employees who are incapable of performing can only be dismissed from employment after the employer had determined that 1 the employee failed to meet the required work standard, 2 the employee was aware of the standard, 3 the employee was afforded sufficient opportunity to meet the standard and 4 dismissal is the appropriate sanction. This process is not always clearly understood by employers frustrated by an employee that is clearly not able to do the work,” Botes explains.According to a labour survey conducted by the Institute of Race Relations, fifty-one percent of South Africans between 15 and 24 are unemployed.The legislature brought some relief to employers in 2002 when introducing a lower threshold against which employers are tested should they dismiss a probationary employee for poor performance Schedule 8, Item 8 to the Labour Relations Act 66 of 1995.Botes notes that if the intention is truly to get businesses to act as institutions of learning, where on-the-job training is provided to workers fresh from school, university or colleges, a relaxation of the strict rules against dismissal for poor performance for first-time job seekers may be the way to go.“Employers are often reluctant to grow their business where such growth requires the hiring of new staff. One of the reasons for this is that it is difficult for the average employer to dismiss staff who is thought to be capable of doing the work required, but could then not come to grips with the work once employed.“If employers are able to readily terminate the service of new recruits who lack the necessary experience, they may be more inclined to give such youngsters a chance in the first place.Botes thinks that employers and needy job seekers may both be pleasantly surprised by the results.“If an employer knows that it can terminate the services of a new job-seeker at will or whilst being tested against for reasons that are automatically unfair only, the employer may decide to provide employment to a larger group of staff than those actually required, knowing that it can retain the best of them after a short trial period.“While the rest of the workers who were not the best at the tasks may then fail to remain employed with the same employer, they would have gained invaluable experience which may assist them greatly in obtaining further employment. The difficulty in getting that into the employment market presents a huge obstacle to our goals of meaningfully reducing unemployment.”He adds, “The current high hurdles laying in the path of employers before being able to dismiss employees for incapacity due to poor performance has not incentivised employers to become institutions of on-the-job training. A different approach is needed if business is expected to actively assist in addressing our skills shortage.”

via School-leavers would gain more employment if SA labour law was amended –  | Political Analysis South Africa.

The rich come clean

Punch cartoon (1907); illustrates the unpopula...

JOHANNESBURG – The South African Revenue Service Sars has uncovered thousands of unregistered high-net worth individuals HNWIs following a year-long investigation and has developed a DNA of these individuals that will allow it to discover thousands more.Its countrywide investigation has uncovered 9 300 HNWIs those earning a gross income of more than R7m per year or who have assets in excess of R75m who could be costing Sars R48bn in revenue, see chart. In a press statement released in April, Sars only had about 360 individuals in this income category registered.

via Moneywebtax – Sars uncovers 1000s of missing rich tax cheats – Income tax

If you are rich and under-declaring, come to Fixed Accounting where we legally help you to pay less tax.

Sole Proprietor

found photo: business leaders

“A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s. This means that the owner has no less liability than if they were acting as an individual instead of as a business” (Wikipedia).

See more on sole proprietors here: SoleProprietor.co.za