Today’s Top Entrepreneurship and Business Stories (25 May)
FEDHASA Calls For Regulation of Airbnb
The Federated Hospitality Association of South Africa‘s (FEDHASA) CEO, Tshifhiwa Tshivhengwa, has said he is concerned about what he regards to be the home-rental platform Airbnb’s “non-compliance.” He has called for government intervention to ensure the online platform becomes industry compliant and regulated to safeguard the tourism sector, according to a report by Bizcommunity.
Speaking at the Indaba Ministerial Session at the Tourism Indaba in Durban, Tshivhengwa said there was a “need for all accommodation providers to abide by the same set of rules and regulations at all times.”
“The hospitality industry as a whole has an obligation to adhere to these various guidelines, they have been created for a reason and it’s vital that they are upheld,” Tshivhengwa said.
“We are not concerned about competition if we are all playing on an equal field. What concerns us are new industry players that are listed on Airbnb that doesn’t follow any regulation, some are not even registered as businesses,” he said.
Tshivhengwa, according to the report, said Airbnb would be a ‘valid segment’ of the country’s tourism industry, provided the hospitality platform abide by a strict set of industry rules and regulations.
“There are rules of engagement and Airbnb needs to adhere to these rules. There can’t be a different set of rules to benefit only them. I know many will say it’s different, it’s a sharing economy and not part of the industry, well if you provide a short term accommodation for gain, it’s not sharing” he said. (via Bizcommunity)
FNB rolls out non-cash dispensing ATMs for rural masses
FNB is partnering with spaza shop owners to become the first bank in South Africa to introduce a non-cash dispensing ATM with deposit capability in a bid to deliver banking services to rural communities.
The bank said the non-cash dispensing ATMs are currently in pilot phase and the extent and areas of roll-out would depend largely on the outcomes of the pilot.
The ATMs are a smaller version of the standard ATM which FNB introduced in 2013 as a way of bringing banking services directly into communities.
The bank said the roll-out of the new generation of ATMs seeks to improve access to banking in most rural parts of South Africa and to broaden financial inclusion.
For easy access, the ATMs are placed at the door step of communities through spaza shops and other general retailers, especially in remote locations.
Lee-Anne van Zyl, chief executive of FNB Points of Presence, said South Africa had many communities that had limited or no access to banking services because they were far from urban centres.
“We are improving access to banking by introducing a new range of non-cash dispensing ATMs which we believe will be incredibly helpful. The cash deposit functionality is an added layer of convenience for the earmarked communities as they will be able to send and receive cash through a channel that is cheaper than going into a branch.”
This version of ATMs can perform a variety of transactions such as airtime and electricity purchases, viewing of statements, paying of traffic fines and performing card cancelations.
Cash withdrawals are conducted by way of issuing the customer with a withdrawal voucher that is presented to the retailer to release the cash and the retailer’s account is credited by the bank.
The model essentially integrates small businesses into the banking ecosystem as the device forms part of their business, potentially increasing foot-traffic to their stores. (via African News Agency)
Further taxes on the cards for wealthy South Africans
The Davis Tax Committee – tasked with reviewing taxation in South Africa in its present form – have indicated that various new taxes aimed specifically at the country’s wealthiest are in the pipeline.
Henry van Deventer, Head of Wealth Strategy at Old Mutual Wealth, says that while the details around these new taxes are still to be finalised, there were various Budget amendments impacting on higher income earners that have now come into effect, which should be incorporated into financial plans in order to maximise tax benefits and safeguard wealth generation.
“The most significant impact of the 2017 Budget on high income earners is the new super tax bracket requiring taxpayers earning more than R1.5 million to pay tax at a rate of 45%. Although this seems harsh for those impacted, the implications are even more severe when considering that this new rate also applies to trusts.
“There is no sliding scale for trusts, which means only the higher flat rate of 45%, previously 41%, applies.”
He adds: “This also means that high-net-earners have seen an increase in their tax levied on capital gains, as the effective rate of capital gains tax for individuals is increased from 16.4% to 18% and for trusts from 32.8 to 36%.”
Van Deventer goes on to say that the Davis Tax Committee has indicated that the manner in which trusts are being taxed is not optimal at present. “Exactly what future measures will be taken to address this is still uncertain, but the question of reviewing the so-called ‘conduit principle’ (currently in force) has been raised.
“As things stand, incomes and capital gains earned in trusts are taxed in the hands of beneficiaries if they’re distributed to the beneficiaries in the same tax year. This effectively means that the South African Revenue Services (SARS) collects less tax if the beneficiaries pay less tax than the trust. Should the conduit principle fall away, all incomes and capital gains earned in trusts will be taxed at (typically) more punitive rates than those that apply to beneficiaries.”
Another area that van Deventer says is currently being looked at carefully is estate duty. “Members of the Davis Tax Committee have also indicated that SARS is not as effective as it could be when it comes to collecting estate duties. Early indications are that there could be more generous abatements (thresholds) in the pipeline, but that a hard look will be taken at ensuring that more assets are effectively captured amongst high net worth individuals for estate duty purposes.”
In light of these new dynamics, van Deventer says that utilising tax-free savings vehicles to their full advantage has never been more attractive, and shouldn’t be ignored.