The big story of the year was the election of Cyril Ramaphosa as the leader of the ANC in the National Elective Conference in December 2017. The victory of Cyril Ramaphosa in the Presidential race has been met with positivity, both abroad and domestically, which has seen a remarkable improvement in the South African economic position over the course of the last quarter.

It is perceived that under this newly established ANC leadership we will see a specific focus on reducing corruption and the boosting of an ailing economy.  This has brought South Africa back into the limelight as an investment destination.  These dramatic changes may even be enough to avert a ratings downgrade by the Global rating agencies as South Africa is better positioned at present compared to previously.  The renewed cooperation between Government and the private sector has caused a bounce in confidence resulting in a strengthening Rand and bond yields coming down.

South Africa is now becoming a more attractive investment destination than it was under the Jacob Zuma leadership.  It bodes well for banks, retailers and some industrial counters that are exposed to the South African economy and these have picked up due to Government’s commitment to fiscal discipline and its willingness to address the wastage within the state owned entities.  Although the growth rate has recently been revised upwards, one does need to take cognisance of the fact that we still have prevailing problems and face significant headwinds in terms of unemployment, the recent focus on expropriation of land without compensation, as well as our health and education crises.

The recent budget by Minister Malusi Gigaba kept personal income tax, dividend tax and capital gains tax unchanged. However, there was a significant increase of 1% to VAT which increased it to 15%. The offshore investment allocation on Regulation 28 investments (pre-retirement funds) would be increased from 25% to 30% and the FSB has confirmed the changes. At the same time, the allowance for investments into the rest of Africa would also increase by 5% to 10%.

Globally, all the major economies are experiencing positive growth, inflation remains low and fairly steady, and as a result some of the developed markets now have the ability to reduce austerity measures.  Firmer commodity prices, stronger currencies and a positive outlook bode’s well for global growth.

From a compliance point of view, we are enduring enhanced focus from our banks, insurers and strategic partners who require further information on client’s details including trusts, beneficiaries and individuals. During the course of the year we may be contacting you to update your Tax Identification Numbers (TIN), as well as other compliance requirements. We will do whatever we can to alleviate this but it is now unfortunately a reality in terms of complying with the myriad of Acts.

On a more personal note, one of our key staff members, Samantha Scott, for those of you who know her, will be getting married and leaving us as she is moving out of the area to be with her new husband.  We are sorry to see her go as she will be sorely missed and we wish her all the very best for her future.

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