Understanding cybercrime and more...

Cybercrime and the role of Directors

The recent pandemic has seen a dramatic move towards the use of technology in the business world. While the use of technology has in some instances increased productivity and eased the way of doing business, cybercrime has become is a global phenomenon with company data being hacked on an all to regular basis. The big question is who is responsible for the safety of data and privacy of information. South Africa has world class legislation which at times does not deter cyber criminals due to the lack of enforcement by authorities. Legislation clearly puts the onus on directors of a company to take all reasonable steps to protect sensitive data.

Directors duties under POPIA, PAIA,the Companies ACT and King IV

·?Section 76(3(c) of the Companies ACT codifies the duty of care of a director by stating that he has a duty to perform his duties in good faith, in the best interests of the company and with due care, skill and diligence that would reasonably be expected of a person carrying out the same functions in relation to the company as those carried out by that director, and having the general knowledge skill and experience of that director.

·?In terms of the business judgement rule, directors are required to take reasonably diligent steps to become informed about POPIA.

·?As the Responsible Party (who processes personal information), a company, or its board of directors, is required to appoint and register an Information Officer with the Information Regulator.

·?Usually the role of the Information Officer is, by default, assigned to the Chief Executive Officer, Managing Director or an equivalent officer of a company.

· Notwithstanding the delegation of authority to the Information Officer or IT Manager (in regard to the protection of cyber security), the board retains overall responsibility over POPIA compliance of the Responsible Party.

·?The board is required to implement a ‘POPI’ programme to ensure the protection of personal information for their ‘Data Subjects’ (employees, clients, customers, suppliers etc).

·?The POPI programme should aim, inter alia, to identify risk areas, develop strategies and policies for POPIA, and ensure the implementation thereof within

·?Cyber security and data protection policies are required to be developed and implemented, not only in compliance with POPIA, but in line with Principle 12 of King IV?.

·?Section 22 of POPIA imposes a mandatory reporting obligation on the Responsible Party – to report a data breach, in writing, to the Information Regulator, where one has occurred.

As can be seen the onus falls largely on directors to protect “Data Subjects” information. If you would like to have a review of your responsibility as a director as regards cybercrime, please do not hesitate to contact us for professional advice in this regard.

Employment Equity Amendment Bill signed into law

President Cyril Ramaphosa has signed into law the Employment Equity Amendment Bill of 2020. The Amendment Bill seeks to advance transformation of South Africa’s workforce by setting equity targets for economic sectors and geographical regions, and requiring enterprises to develop transformation plans.

Among its key provisions, the Amendment Bill empowers the Minister of Employment and Labour to set employment-equity targets for economic sectors, as well as regions where transformation is lagging. The amendment Bill also empowers the Minister of Employment and Labour to regulate compliance criteria to issue Compliance Certificates as per Section 53 of the Employment Equity Act. The amended Act allows the Minister of Employment and Labour to set regional targets given that racial diversity in South Africa often has regional differences.

The law requires employers with more than 50 employees to submit employment equity plans for their companies, spelling out how they will achieve these targets. Employers are then required to submit annual reports to the Department of Employment and Labour.

In the area of remuneration, the law requires employers to pay workers equal pay for equal work. The Bill provides clear definitions of discrimination and sets out what workers can do when facing such discrimination - including lodging grievances with the Commission for Conciliation, Mediation and Arbitration, or the Labour Courts.

Companies seeking to do business with the state will be required to submit a certificate from the Department confirming that they are in compliance with the Employment Equity Act and its objectives, and that they do not pay their employees less than the national minimum wage. As part of ensuring the employment equity objectives become reality, the law now compels labour inspectors to inspect workplaces and to issue employers with compliance orders.

Should you have any queries regarding the above please do not hesitate to contact us in this regard.

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Tax Implications on the leasing of property

The tax implications for the leasing of property can be complex. For your information we set out the basic TAX implications for the leasing of property.

For the landlord

·?All income received from rental of a property is of a revenue nature and has to be declared as part of a landlord’s gross income.

·?Deductions are available, such as: interest on bond repayments, repairs and maintenance, municipal rates and taxes, letting agent’s fees (if applicable), and expenses not recovered from the tenant, such as security, utilities or garden services. In the case of a sectional title scheme, the levy is also deductible.

·?In order for the deductions to be allowed the expenditure must have been actually incurred in the production of income and not be of a capital nature. The landlord must effectively be able to satisfy SARS that he is carrying on a bona fide trade through the rental of his property.

·?The cost of improvements, reconstructions or additions to the property cannot be deducted, as these expenses are of a capital nature. Improvements made to leasehold property in terms of a lease agreement by the tenant must be included in the income of the landlord. Either the stipulated amount or a fair and reasonable value will be included. There may be relief available for the landlord, in terms of Section 11(h) of the Income Tax Act.

For the tenant

·? The tenant can claim the rental expense as a deduction for tax purposes if the rental payment or expenditure was actually incurred in the production of income.

·??If improvements are made to leasehold property in terms of a lease agreement by the tenant, these must be included in the income of the landlord. Either the stipulated amount or a fair and reasonable value will be included.

·?The tenant may deduct such expenditure over the period of the lease. The landlord may be entitled to discount the value of the improvements over the period of the lease or 25 years, whichever is the shorter.

Should you have any queries regarding the above do not hesitate to contact us for professional advice in this regard.

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