Johannesburg; 26 February 2020: All eyes were on Tito Mboweni, Finance Minister of South Africa, as he delivered the annual Budget Speech this afternoon.
Even the big guns didn’t really know what to expect. Economists had shared their view that people are tired, and wanted a change that had the potential to lift South Africa out of junk status.
“If we look back at organisations such as South African Airways and Eskom, both of which are under a mountain of debt, it didn’t look too promising,” Corné Welman, Head Of Compliance at PaySpace, a leader in cloud-based payroll and human capital management software.
“Everyone is hoped the Minister would have a rabbit to pull out the hat, and would do something positive for the country, and we were pleasantly surprised,” she says.
According to her, the biggest concerns PaySpace had with the official budget, was that it was clear that the government has spent too much money. “This combined with weak growth, ballooning debt, and cash guzzling state-owned enterprises, painted a pretty bleak picture.”
However, she added that the Finance Minister made it clear that he didn’t want taxpayers money to be used to pay for the government’s debt. “We’re going to pay a lot less tax, which is good news.”
“Instead of raising personal income tax, the government is reducing the public service wage bill, which we predicted would happen,” Welman explained. “Let’s face it, rising tax doesn’t help the government decrease debt or increase growth. They have to find ways to reduce this bill by 1% over the next three years, and that will go a long way towards stabilising the economy.”
For PaySpace, the focus is on how quick we could implement the changes, so it doesn’t impact on customers. “We have already implemented all changes on our system in terms of adjusting income tax brackets, medical aid rebates, and age tax thresholds. From the 1st of March when it all comes into effect, we are good to go.”
“Each year following the budget speech, it takes companies a long time to process all the information. They need to listen to the speech, then analyse the content, and then build any changes into their systems,” she explains. “Traditionally, changes will only be made in the first two weeks of March. However, PaySpace differentiates itself by making any necessary changes instantly, and that is what we have done this year again.”
Speaking of other elements of the budget, Welman says unsurprisingly, VAT would remain the same. “Statistically, increasing VAT won’t take the country out of a bad economy, because percentages are too low. It’s not enough, a mere drop in the ocean.”
Also, she says there is a proposal on the table that SARS may refuse to authorise PAYE refunds until a taxpayer furnishes any outstanding refunds. “Catching tax evaders is another step in the right direction.”
Finally, Welman says it was announced that the government is going to start working with civil society. “The plan is to invite international finance ministries to explore further participation in the mechanism of budgeting. They will use their contacts, and implement small projects to help better manage the budget.”
PaySpace is a true cloud-based HR and Payroll solution established in 2000. As one of the brands that fall under the Insight IT Group umbrella, PaySpace is the leader in online Payroll and HR solutions and services across Africa and abroad. With an integrated, real-time, SQL platform offering unified HR, payroll and Human Capital Management (HCM) across 40 African countries, PaySpace offers embedded analytics, manager and employee self-service, therefore, enabling businesses of all sizes to run a fully tax and legislative compliant, ISO/IEC certified, cloud-based people management solution.
PaySpace is the only HR and Payroll solution in Africa with International Organisation for Standardisation (ISO) 27001 certification, a testament to PaySpace’s commitment to safe and secure protection of data. PaySpace was awarded 2019 Payroll Software Supplier of the Year at the Global Payroll Awards in addition to achieving the 2019 Top 25 HR Software Award via The Software Report.