HR Pulse

5 Key aspects Rob Cooper will be looking out for in the Budget Speech

The Budget will be announced on 24 February at 14:00. Rob Cooper, Tax Expert and Director of Legislation Updates and Proposed Legislation at Sage HR & Payroll says that:

• Finance Minister Pravin Gordhan could save the South African Revenue Services (SARS), businesses and employees a great deal of time and hassle by phasing out travel allowances that companies pay to employees as part of their salary packages.
• Though radical and likely to be unpopular in some quarters, this proposal could ease tax compliance for companies and employees while making life simpler for SARS.
• That’s the word from Rob Cooper, Tax Expert and Director of Legislation and Proposed Legislation at Sage HR & Payroll, South Africa’s market leader for integrated payroll & HR systems, who proposes that the existing mechanism of travel reimbursements replaces travel allowances in the years ahead. This simple change is near the top of his wish list for Minister Gordhan's Budget Speech this year.
• Cooper says travel allowances add little value for anyone in the equation because they are widely misunderstood and difficult to administer.

Rob Cooper also captured some of his comments around 5 key aspects he would be looking out for in the Budget Speech, here are short sound bites.

1. Travel Allowances:
Key quote: “Travel allowances are arguably the most misunderstood and possibly the least compliant areas of remuneration paid to employees.”
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2. Retirement Reforms:
Key quote: “What I am looking forward to in this budget is the next phase of this process that will hopefully be spelt out, and that is the area where more focus will be placed on the retirement funds themselves in terms of simplifying the products that they offer and reducing the administration costs involved with those products ”
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3. National Health Insurance (NHI):
Key quote: “we are hoping that in the 2016 Budget more information will be made available. The National treasury has recently issued a discussion document on the process, but again the critical element of how this extremely important project is going to be funded was not really addressed”
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4. Employment Tax Incentive (ETI):
Key quote: “It is an essential project in the light of the very high unemployment figures we have at the moment. We hope that the current legislation will be replaced by something better or be improved to make the uptake of the Incentive a lot better than what it is at the moment.”
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5. National Minimum Wage:
Key quote: “The National Minimum Wage has been with us for a long time and we are hoping in this coming budget that we will have some sort of a firm proposal as to whether it is going to ahead or not. It seems that it’s a question of when it will be implemented not if”
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