 Every year, the South African Institute of Professional Accountants (SAIPA) holds its National Accounting Olympiad. Entries for this year’s competition are now open and the Institute invites all schools to begin registering pupils who wish to participate.
Zobuzwe Ngobese, Marketing and Communications Executive at SAIPA reports that, since its inception in 2002, the competition has continued to grow in popularity. “For 2019, we're expecting our best turnout yet,” he says. How it works NAO 2019 entrants from grades 11 and 12 will write an accountancy test at their respective schools. Afterwards, representatives from SAIPA will mark the papers and select those with the highest scores. The top three students nationally in each grade will then be declared as the overall winners. These champions will be awarded at a gala event whose date and venue will be announced nearer the time. They and their teachers will also receive prizes and be featured in the media. Bring it on Last year, thirteen winners tied for the top three spots provincially and nationally across the grade 11 and grade 12 categories. Eight pupils from Johannesburg public school, King Edward VII, reached the national top 50. Western Cape’s Rondebosch Boys High placed one grade 12 winner and two in grade 11. And the province to beat this year will be Kwazulu-Natal, which shone brightly in 2018 with six winners out of the total thirteen. “It was an incredibly tight competition,” says Ngobese. “So we’re excited to see what happens this time around. Will KwaZulu-Natal give a repeat performance or will another province rise to the challenge? And who will push the envelope to be the only winner in their spot? All I can say to the entrants is, if you're in it to win it, study hard and bring your A game.” Encouraging accountancy The NAO competition is a key part of SAIPA’s strategy to promote accounting as a career of choice among schoolgoers. South Africa needs new accountants to continually enter the job market. A significant lack of interest now will mean a skills shortage seven to eight years in the future. “Accounting is an exciting and rewarding career, so we want teens everywhere to seriously consider it as they prepare for tertiary studies,” says Ngobese. The NAO 2019 is also a good way for scholars to get a taste of the profession. They’ll have the opportunity to interact with SAIPA staff, sponsors and potential future employers. How to enter Pupils wishing to compete must be registered by their schools on the NAO website at https://www.saipa.co.za/national-accounting-olympiad-2019/ . The entry fee is R50 per student but free for no-fee schools. There is also no limit to the number of pupils each school may register. However, entrants must currently be taking Accounting as a school subject with the intention of studying a B.Com degree. Entries close 14th June 2019. The exam will take place on 29th July 2019 and winners will be announced after all papers are scored. The NAO website will be updated as the competition progresses and participants should visit it regularly for the latest news and information. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants
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 South Africa will reach the fiscal cliff by 2042 if does not change its ways and back up speech with concrete actions, says Professor Jannie Rossouw, the Head of School of Economics and Business Sciences at Wits Business School.
Speaking at a budget breakfast hosted by the South African Institute of Professional Accountants (SAIPA) in Sandton, Rossouw warned that if the actions of the government in managing the fiscus are not prudent, taxpayers were going to stop paying taxes. “If we use the analogy of fishing, the taxpayers are the ones fishing and the government takes the fish and eventually people will stop fishing because they don’t see their fish being put to good use,” he says. According to Faith Ngwenya, Technical and Standards Executive at SAIPA, the main takeaway from the budget speech is that the country is in trouble and needs to take proactive steps to recover. “People who are taxed too much, either directly or indirectly, will stop being productive or find ways to reduce their tax bill, often illegally,” she says. “At that point national revenues drop with any further tax increases. We are now at that point. So the government’s future income will have to be derived from reducing its own costs, which starts with fulfilling its promise to turn around SOEs and reduce its enormous wage bill.” Below are the top budget speech takeaways discussed at SAIPA’s event: GDP GDP was forecast at 1.5% against an IMF global projection of 3.5%, with improved growth predicted over the next 3 years. “The Treasury has been overly optimistic in its GDP forecasts for many, many years,” says Professor Rossouw. “They overestimate their revenue, then spend according to this estimated revenue. Then they don’t make the revenue because GDP growth is lower, and they end up in a fiscal hole.” Rossouw recommends that Treasury use more conservative forecasts to regain the public’s confidence. Wage bill reduction The government promised to reduce its wage bill by R23 billion over the medium term and offer voluntary retirement to older public servants. This is a good start but needs to be followed by reviewing the public sector workforce and reducing it dramatically. Revised visa requirements and e-visa pilot To attract needed skills to South Africa from foreign countries, the government will review its business visa and child immigration requirements as well as pilot an e-visa system. This is great news as it will help South Africa more readily attract the talent needed to bolster the economy. Revision of support for SOEs SOEs will need to meet certain business transformation requirements to receive future support from the government and Eskom will be broken into three independent divisions. While this is a positive step forward, any support is still like throwing money down the drain. A more concrete plan of action is needed and the process should be communicated transparently to the public. Annual budget deficit Professor Rossouw also noted that the annual budget deficit would be around 4.3% over the next three years, up from 3.5% just last year. “This is too high,” he says. “Our growth ceiling is only 2.5% per annum.” Tax collections and revenue shortfall Total tax collections for 2018/2019 was around R1.3 trillion with a shortfall of R42.8 billion and the government expects to collect R1.422 trillion next year. Mboweni announced there would be no changes in personal and company tax but additional revenue of R15 billion would come from indirect taxes. Although tax remains unchanged, indirect increases will reduce overall disposable income, meaning South Africans will have to adjust their lifestyles accordingly. Revenue from tax bracket creep Income tax brackets will also not be changed. This means that although South Africans will not gain greater purchasing power from inflation-based pay increases, they will be earning more in SARS’ eyes and will be taxed accordingly. Further, those who move into a higher bracket will be obliged to pay substantially higher taxes, reducing their effective monthly income to below their previous level. No increases in medical tax credits Medical tax credits will not be increased to allow for a rise in cost of living so South Africans will effectively be paying more for medical treatment. Income from fuel increases Fuel will go up by 29c/litre, which includes a 15c/litre increase in the general fuel levy and a 5c/litre increase in the Road Accident Fund levy. A carbon tax of 9c/litre on fuel will be effective from 1st June 2019. All of this was expected. Excise duties Excise duties on alcohol and tobacco will be increased. Further increasing the price of tobacco is a bad idea. We are already witnessing the sale of illegal cigarettes overtake legally marketed ones. Another increase will further motivate cash-strapped smokers to buy on the black market. Restoring SARS effectiveness Mboweni also promised to repair SARS to ensure it is able to collect revenues effectively. And with the VAT refunds backlog being cleared, the normalised flow of future refunds will provide businesses with greater cash flow confidence. Much revenue is lost to tax collection inefficiencies, so it makes more sense to focus on SARS’ operations rather than increasing direct or indirect taxes further. ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants African Global Operations Group (former- Bosasa) to Liquidate, Beyond Rehabilitation Says SAIPA18/2/2019  Faith Ngwenya, Technical and Standards Executive at the South African Institute of Professional Accountants (SAIPA), says that while it is possible, it is highly unlikely that African Global Operations Group could be rehabilitated if sold.
eNCA broke the story early today that South African banks had given notice to African Global, formerly called Bosasa, that they would terminate its accounts at the end of February. This was reportedly done for fear of “reputational damage” from doing business with the company following revelations of its alleged bribery of government officials to win tenders. In response, African Global announced it has filed for voluntary liquidation in accordance with the provisions of the Companies Act as it will not be able to pay its creditors without proper banking facilities. Irreparable damage Ngwenya says that usually voluntary liquidation is more relaxed than forced liquidation, giving the directors time to get their affairs in order before winding down. However, in this case, the company will not have the banking services required to receive income or pay creditors and employees. “This is a very different scenario because of the short period in which the company has to act,” she says. “But it’s not probable they would be able to wrap everything up in 10 days.” When asked if it was possible for the company to be bought and turned around, Ngwenya said under normal circumstances it would be possible , however in the African Global case it was doubtful. She observed that the damage to African Global’s reputation would be too extensive, resulting in an irreparable loss of customer confidence and market value. “Any buyer would find it very difficult to restore its viability as a going concern,” she concluded. Employees and subsidiaries With the inability to continue operating, it is most definite that a reported 4500 workers will lose their jobs. Any contracts the company entered into would also have to be terminated, resulting in loss of business for their subcontractors and suppliers as well. Says Ngwenya, “Because they have a large number of government contracts, some of them for critical services, it will have to be determined whether and how these would be transitioned smoothly to alternate vendors.” Ngwenya also noted that the business had several subsidiaries that too faced an uncertain future. She questioned whether these business units would go into liquidation as well or if they would be spared. If the latter, would they be able to absorb the employees that would otherwise be retrenched? “Unfortunately, a scandal of this magnitude taints the entire company, so the next few days will tell us if these subsidiaries will suffer the same fate,” she says. Business rescue option Since SAIPA offers a business rescue designation, Ngwenya was able to comment on whether African Global should have opted for business rescue as they are entitled to do under the Companies Act. “Business rescue is always the preferred alternative to liquidation because it preserves jobs that would otherwise be lost as well as the economic contribution of the organisation,” she says. “As we’ve noted in this case, though, the loss of trust in the company’s brand is too great and its closure is unfortunately inevitable.” ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants  Finance Minister Tito Mboweni’s upcoming 2019 Budget Speech on 20 February will be a waltz with the recent SONA to the tune of the upcoming elections. This is according to Ettiene Retief, Chairman of the National Tax and SARS Committee at the South African Institute of Professional Accountants (SAIPA). Says Retief: “President Ramaphosa’s address set the tone for the budget, which must also keep ANC voter confidence high when the nation goes to the polls on 8th May. But with revenue collection under constant pressure and a shrinking taxation profile due to immigration, high unemployment and job losses, and the results of poor economic growth, the question remains - how will the President’s vision be funded?”
Income sources In his October mini budget speech, Mboweni stated outright that the country could not continue borrowing as it is currently doing. So it looks as if funding the budget with more debt is definitely Plan B. Yet the consensus among commentators is that any opportunity to increase primary taxes is limited and undesirable. The Finance Minister appears to agree, indicating that changes to the current personal and corporate income tax rate or VAT should be avoided. However, the government may still have some wiggle-room with other taxes. These include adjustments to high ticket or luxury items, reducing tax allowances and deductions, and possibly extending its attack on estate planning and the use of trusts. Indirect taxes, such as sin tax - alcohol, cigarettes or sugar - might see further increases, as well as the Road Accident Fund and fuel levy. One would expect that the new Carbon Tax, scheduled to come into effect from 1 June 2019, will not be postponed further. Mending the dam An obvious place to find extra funds is by cutting huge losses in government itself. Specifically, these include the exorbitant wage bill and the cost of supporting several limping state-owned enterprises, among others. “Fix these first,” says Retief. It is public knowledge that SARS’ capacity to meet its collection targets has been severely compromised. Mboweni did commit to mending SARS during the mini budget speech, so it follows that his next address should outline his plan for doing so, which includes the funds needed to address the aging IT infrastructure, and the appointment of a new Commissioner. He has also been outspoken on his approach to correcting SOEs: stop bailing out Eskom and sell SAA. With an unsolicited - if sketchy - R21 billion offer for 51% of SAA on the table and the plan to unbundle Eskom, these should at least receive mention in his speech. But it is expected that any major policies or structural changes will be held over until after the elections. In an election year the pressure is on to allocate money to fund the various initiatives, policies, and promises made, such as national health and free education. However, how can we afford this without significantly increasing our budget deficit or cutting other spend? Furthermore, Mboweni previously stated that per head salary increases in government were often well in excess of inflation and had to be reigned in. A constructive policy for doing so should be a main feature of the budget, as well as at least a mention of the steps that will be taken to bring people to book for fruitless and wasteful expenditure. Freeing revenues “Whatever happens, these problems can’t be fixed by throwing more money at them and they won’t be resolved overnight,” says Retief. “However, by at least beginning to tackle them, their strain on tax revenues can be alleviated over time and that means a growing pool of income for other projects.” ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants SOURCES:
 SAIPA’S Professional Evaluation Graduation Ceremony at Greyville Convention Centre in Durban on 2 February 2019.
From left to Right: Nazia Ismail - 2nd Regional Top Achiever; Pranisha Moodley - National / Regional Top Achiever; Nomawethu Tenza – 3rd Regional Top Achiever* Photography courtesy of SnapThat™ Pranisha Moodley was recently named as Regional Top Achiever, as well as overall National Top Achiever during SAIPA’S Professional Evaluation November 2018 Graduation Ceremony at Greyville Convention Centre in Durban. Following in Moodley’s footsteps are Nazia Ismail (2nd place Regional Top Achiever) and Nomawethu Tenza (3rd place Regional Top Achiever). The future with SAIPA Professor Rashied Small, Executive: Education and Training at SAIPA, congratulated the successful candidates and welcomed them as competent Professional Accountant (SA). “Those who passed have proven their competence and may now proudly bear the distinguished title of Professional Accountant (SA),” he says. “We are delighted and have encouraged them to take to register as full members and look forward to supporting them throughout their careers and endeavours. With their Professional Evaluation behind them, these newly fledged Professional Accountant (SA) holders may go on to, say, work at corporations, start their own private practice or even extend their skills to specialised fields, like tax consulting. Whatever they choose, each will be considered a valuable business advisor.” The purpose of the PE The Professional Evaluation is a four-and-half-hour written competency assessment (aligned with the International Education Standard – IES 6 issued by IFAC) that every prospective SAIPA member must complete before being granted access to the Institute’s ranks. Prerequisites for taking the assessment are a SAIPA approved degree or diploma (aligned with IES 2) and the completion of a three-year learnership at a SAIPA accredited training centre (ATC) (aligned with IES 3 – 5). The stringent pre-entry evaluation is a distinctive requirement that sets SAIPA apart by evaluating the applicant’s ability to apply what they have learned to complex practical and ethical problems. “We don’t assume an accountant to be competent,” explains Professor Small. “Rather, they must be able to demonstrate their proficiency on demand. This assures the public that our members understand their burden of responsibility and are equipped to practice professionally from the very beginning.” ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants  A late-2018 study from IFAC titled Make Way for Gen Z: Identifying What Matters Most to the Next Generation suggests accounting is the perfect career choice for today’s young adults. Zobuzwe Ngobese, Marketing and Business Development Executive at SAIPA, says it is a timely insight into the aspirations of the new generation, some of whom are still deciding on their career while others are already entering the workplace. “The document reports that people in that generational group mainly desire stability and job security,” he says. “The accounting profession satisfies this requirement as well as many others revealed by the survey.” The study is also an invaluable guideline for employers who need to understand what motivates the next wave of workers to maintain high productivity in their organisation.
What Gen Z wants The report classifies Gen Z as those born between the mid-1990s and around 2005, who will make up one third of the global workforce within a decade. Their bias toward economic stability - both personally and marketwise - and nationalism over globalism, stands in stark contrast to the previous Millennial generation’s “live the dream at any cost” outlook. Ngobese observes that Gen Z were fundamentally affected by the economic crisis of 2008 and therefore yearn for greater security. The study surveyed 3388 people between the ages of 18 and 23 in G20 countries, considering two broad topics - public policy, and careers and work. It revealed that the majority want their governments to focus on their country’s economy, quality of education and availability of jobs. 51% prefer a national approach to policy while only 32% desire a globalist approach. 89% prioritise a stable career, 87% a competitive salary and benefits, and 84% a good balance between work and life. Although lower in their priorities, the majority are keen on leadership opportunities (64%), working abroad (63%) and driving business strategy (63%). South African perspective In South Africa, the main Gen Z concerns are, first, stopping corruption in government and corporations, followed by addressing income and wealth inequality and, third, tackling climate change. 63% favour a nationalist approach. It is notable that, in South Africa, those surveyed prioritised the ethics of their chosen industry or profession ahead of work-life balance. “This is exactly the attitude required for SAIPA to realise its vision of a new era of ethical accounting for the country,” says Ngobese. Over half of the respondents indicated they will pursue or would consider pursuing a career in accounting. Professional Accountant (SA) Ngobese says SAIPA’s Professional Accountant (SA) designation is the ideal career path for Gen Z. Its ultimate goal is economic stability, it is backed by strong ethical standards to protect the public and national interests, and it is one of the most stable and rewarding careers in history. “We definitely need professionals with Gen Z’s strong moral and economic ideals.” Information on education, practical training and membership entry requirements for becoming a Professional Accountant (SA) can be found on SAIPA’s website at www.saipa.co.za. Employers may review the IFAC study at https://www.ifac.org/publications-resources/make-way-gen-z-identifying-what-matters-most-next-generation ENDS MEDIA CONTACT: Stephné du Toit, 084 587 9933, stephne@thatpoint.co.za, www.atthatpoint.co.za For more information on SAIPA please visit: Website: www.saipa.co.za Twitter: @SAIPAcomms LinkedIn: South African institute of Professional Accountants Company Facebook: South African Institute of Professional Accountants SOURCES: https://en.wikipedia.org/wiki/Generation_Z |
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