Economic review


Our Sona and the presentation of the state budget have come and gone. The annual predictables have been hauled out and they are:


An interesting statistic is that there are about 1, 8 million fewer taxpayers who paid tax in the year past. Of those who pay 16,000 are taxpayers who have moved up to and earn more than R1.5 million and an additional 26,000 earning R1m or more.


One interesting note was privatisation that isn’t: Mr Gordhan refers to “co-funding partnerships”. I am sure that this will please our socialist compatriots no end at all.


Job-growth has practically stagnated. The State says it aims to reduce unemployment to around 6% over the next 15 years. Anyone who has listened to previous job-the creation promises must be sceptical.


PwC says that the increases in capital gains tax, to be levied on companies and trusts, made them CGT tax-wise, virtually indistinguishable as vehicles for investment.


A new take on the gospel of capital inflow comes from StanLib: Lings says that it is not the downgrade to junk status that that matters; what counted was whether a country responded with appropriate policies or not.


New news is:

  • Goldman Sachs has warned that Brazil was approaching fiscal insolvency (again?) and Moody’s has chopped that country’s credit rating by two levels.
  • An interesting concept is the Liber, a grant to everybody to off-set lack of earnings and so on. Those who are dabbling with this concept are France, Finland, Switzerland and some towns in the Netherlands. The only area in which this has been introduced is the oil state of Alaska.


Business review


Vienna still offers the highest quality of life of all cities in the world.


CEO tenure: a recent study says that the optimal tenure for CEO is 4.8 years.


Two interesting ideas on drugs and how to combat them have emerged: the 1st says that drugs do not enslave per se: Drugs work when one is bereft of social support. See:

The 2nd says that by restricting drugs one pushes up the price, making drug dealing profitable. If one were to keep the price down and make the product available the incentive to provide drugs would disappear.

Coupled with the above idea this might actually make drug dealers unprofitable and thus obsolete.


Zimbabwe intends consolidating all diamond mining companies into one. At present those affected are digging in their heels and it would be quite interesting to see what transpires. You can bet there are no Chinese companies amongst those?


Curro is issuing a 6th rights issue in May. If one considers this in addition to the Afriforum initiative which has launched private (Afrikaans) universities, then it must be clear that the entrenched state-sponsored universities may well be sidelined by those for which the users pay. Who, after all, wants to be affected in the current wave of nonsense that is sweeping our institutions of higher learning.,


An interesting development is a lexicon of standard correct financial terminology that the ICC has created and will be launched in March. The idea is that terminology for, by way of example, “reverse factoring” varies from user to user and creates confusion.


Practice review


The Constitutional Court has been asked whether the now, 20-year-old arrangement in the Labour Relations Act on sectoral collective bargaining is constitutional. The current arrangement is that if a union has a 50% and more representation across a sector, it negotiates on behalf of all the workers in that sector


Property review


It is reported that some property fund managers are allocating new money to off-shore-focused listed property only because they expect the potential of local vehicles to disappoint. Our domestic real estate is tipped to barely beat inflation this year.


There are two primary house-price indices in South Africa; the Absa House Price Index and the First National Bank House Price Index. HomeBid’s Index is said to be a better measure: it gives the price change percentage for a price bracket. By way of example it gives a positive price change percentage for houses in the R10m plus bracket of 2% for 2015, compared with 2014. For the more mundane properties it gives a 0.2% equivalent for houses priced between R1m and R1.5m. Worth watching if you are selling.


An interesting article supporting the Expropriation Bill, now an Act, came from a professor at NWU: she says that the criticism of that legislation is mostly unfounded. That legislation follows the Constitution and is in accordance with this. Her sole criticism of that Act is that it will not speed up land reform. Efficiency in restitution of land depends on efficient policy implementation.


Cases & such


Ownership of wildlife


Our common law provides that wild animals, which are not controlled by a person i.e. within a controlled environment, are not owned by anyone. Control is determined case-by-case but, where the legislation provides that a certificate may be issued by the State, declaring that game enclosures comply with certain standards, the game within those enclosures belong to the person in favour of whom that certificate is issued.

Eastern Cape Parks and Tourism Agency [2016] ZAECGHC 2


Developers and liability for home owners’ association levies


A developer is not necessarily liable for homeowners’ Association levies. The liability is determined primarily by the governing documentation. Essentially, if a developer wishes to avoid such liability it should have this written into the contracts which underlie the scheme into which an owner buys.

Sable Hills Waterfront Estate Home Owners’ Association  [2015] ZAGPPHC 831



In duplum rule: interest on capital


In our common law the above rule holds that interest on capital should never exceed the capital advanced. Does interest accrue beyond the capital after institution of legal proceedings? If this interests you, ask me for an article on the matter written by Otto in the 2015 TSAR 863. Note that this is in Afrikaans.



Limitation of actions on behalf of a company: section 20


Section 20 of the Companies Act would appear to provide that no action on behalf of a company will be void simply because that action is prohibited in its memorandum. V/d Linde (UJ) has written an article on this which, if reduced to its essence, provides that if (constructive) notice of some limitation is not given, the company will be bound. This is a complex article and is recommended for those who dabble in company law. Ask me for a copy.

2005 TSAR 833.




The best argument against democracy is a five-minute conversation with the average voter. Winston Churchill


Lighten Up


Who makes the best detective - Sherlock Holmes or a tax accountant?

The tax accountant - she makes more deductions.


If a tax man and a lawyer were both drowning and you could only save one, would you go to lunch or read the paper?


South Africa is the land of opportunity. Everybody can become a taxpayer.


Nothing makes a person more modest about their income than to fill out a tax form.


Some people think the government owes them a living.

The rest of us would gladly settle for a small tax refund.