Week 18 ending 28 April 2024
Ben Pieters - the Business Support Specialist
Constantly challenging ourselves to deliver more to our clients.
Welcome to 'Navigating GRC' your guide through the intricate landscape of Governance, Risk, and Compliance.
Corporates and homeowners, stay ahead of the curve with expert insights, practical strategies, and industry best practices.
Lifelong learning is not just a professional requirement but a strategic advantage in the dynamic world of GRC. Unlock the power of effective GRC to drive business success and mitigate risks.
NPOs abused for terrorism financing
Amanda Visser reports in MoneyWeb that Government has finalised an assessment of non-profit organisations (NPOs) - defined as entities that further a social cause and provide a public benefit - in the country to determine their risk of being abused for terrorist financing, finding that the overall inherent risk of terrorist financing abuse of NPOs in South Africa is medium.
The assessment was commissioned to address non-compliance with Financial Action Task Force (FATF) global standards on the combatting of terrorist financing and money laundering. The FATF also found that SA cannot monitor or investigate NPOs identified to be at risk of abuse.
The report also identified “inherent vulnerabilities” that may put NPOs at risk:
It identified five possible threats to NPOs:
Stage 16 load-shedding schedules
Stage 12 means no power for 24 hours and it gets worse …
The new Code of Practice has reportedly been approved by the National Energy Regulator of South Africa (Nersa).? The major change is that load shedding now runs across 32-hour cycles, not a typical 24-hour one.
There will be three 32-hour cycles every four days (4 x 24 = 96 hours, 3 x 32 = 96 hours).? Stage 1 is no longer equivalent to 1 000MW - rather, it equates to 5% of demand.
Because the schedule runs across 32 hours, even at Stage 12 – with 24 hours of power being off – this would still mean eight hours of ‘power on’ across that 32-hour cycle. So, six hours off, two hours on. Times four.?
Up until Stage 8, the structure of load shedding is as per the current breakdown. The major difference is that this is across 32 hours, not 24 hours
We now know that at Stage 16, residential and commercial customers will have zero power. Practically speaking, there’s almost zero chance of getting there. This implies that the entire coal fleet will not produce a single megawatt.
Eskom's load shedding remains a major risk to consumers. Anticipate a worst case and act to mitigate this. No one else is going to assist you.
RAF challenge of AG disclaimer dismissed
Roy Cokayne reports in MoneyWeb that the Road Accident Fund (RAF) says the court ‘misapplied and misdirected itself’ and will consider appealing the judgment.
The High Court in Pretoria dismissed a RAF application to review and set aside the AG’s disclaimer of the fund’s 2020/2021 annual financial results and to declare the disclaimer invalid and unlawful.
The previous RAF board rejected directives from Parliament’s Standing Committee on Public Accounts (Scopa) not to proceed with litigation against the AGSA about the appropriate accounting standard to be used. Scopa chair Mkhuleko Hlengwa said, “There is a strong basis for charging the RAF board of directors, including the CEO, with dereliction of duty and declaring them delinquent directors under the Companies Act”.
The result of the change in accounting methodology was that the fund’s liabilities plunged from R327 billion in 2019/2020 to R34 billion in 2020/2021.
In previous years, the RAF used the International Financial Reporting Standards (IFRS) 4 accounting standard on insurance contracts. It is this with which the AGSA took issue and thus issued the disclaimer.
Tunnel closure not a significant effect
The upcoming six-month closure of the Lesotho Highlands tunnel, from October 1, 2024, to March 31, 2025, for scheduled maintenance is not expected to have a significant impact or disruption on Gauteng’s water supply.
This much-needed maintenance is critical to maintain the integrity of the delivery tunnels.
An analysis indicated that the impact of the outage on the overall Vaal River Systems would be insignificant considering that dams, were relatively full, which meant that they could provide a reserve supply of water to top up the Vaal dam as needed.
It is strongly suggested that consumers mitigate the potential risks by sinking boreholes. Department of Water and Sanitation (DWS) relies on restricted water extractions by many farming communities, which may not materialise.
South Africans running out of money
FinMark Trust’s annual FinScope Consumer South Africa for 2023 showed that the rising cost of living is significantly impacting South African households’ wallets.?
It found that
These rising costs affect not only the ability to invest in education and insurance but also contribute to the inability to repay debt.
According to the National Credit Regulator’s Credit Bureau Monitor for March 2023, 23% of consumers missed instalment payments.
Times are tough. The risk we all face is to hang on to unnecessary assets for too long. Protect your cashflows. Take a financial knock on disposing of assets if you can do without it.
VIP ‘blue light?brigades’
The South African Police Service (SAPS) has spent over R42 million on petrol and diesel over the past six years for its VIP Protection alone, which works out to just over R583,000 per month.
领英推荐
It's clear that South Africans are suffering from crushing cost of living, including higher fuel prices, the ANC VIP cadres take the taxpayers for a ride without having to put their hands in their pockets. Considering that the South African government spends more money protecting VIP millionaire ministers and politicians than it does on policing services for serious crimes.
Taxpayers pay the same to keep 200 government VIPs safe as they do to investigate all serious crimes in the country.
Good governance means little to us if consequence management is not practised by the Government. The country is in critical need of policing serious crimes, but the money is rather spent on VIP protection.
SARS double-tax warning
According to consulting firm Latita Africa reporting in BusinessTech, SARS's inefficiencies are leaving expats in limbo, contending with double taxation unnecessarily.
Many expats depend on Double Tax Agreements (DTAs) entered into by SA and the respective foreign governments, to prevent double taxation on the same earnings. South Africa has 22 DTAs that provide for this relief, including agreements with the UK and New Zealand, among others.
However, concerns are growing about applications submitted to SARS, pointing out systemic inefficiencies which are causing delays in crucial decisions. A DTA does not automatically apply, and the taxpayer must claim the relief measures.
If an individual has been a tax non-resident for three or more years, they can cash out their South African retirement interests as a lump sum payment.
It was reported that claiming DTA relief from tax on annuities in South Africa is theoretically possible, but in reality, it is difficult to get an actual outcome from SARS on the matter. The lack of transparency and consistency in the SARS application process and the absence of any structured timeline for processing these applications exacerbates the situation.
Jobs bloodbath worsens
Implats has initiated a Section 189(3) consultation process at its South African operations and aims to cut roughly 3,900 jobs, adding to the thousands of jobs already cut in the sector.
Global macroeconomic uncertainty and rising geopolitical tensions present additional downside risks to industry sustainability.
The group will conduct a fair and transparent consultation process according to its CEO, with no final decision made until full and proper consultation is conducted with the affected employees and their representatives, in compliance with the Labour Relations Act.
The corporate office has also not been spared, which is targeting a 30% reduction in head office costs. Implats already cut more than 1,000 jobs in the second half of 2023.
Sibanye Stillwater also looking to cut 4,000 jobs. Its proposed cuts aim to restructure its gold operations and its Southern Africa (SA) region services functions.
Global price pressures and local transport issues remain the biggest risks faced by mining companies dependent on the export markets.
SA’s water shortages.....
The water expert, Professor Anthony Turton spoke on a podcast, saying that every drop of water in Gauteng is pumped over the Drakensberg Mountain, from the Tugela River, using surplus energy on the national grid. Thus recovering, recapturing and reusing are key to addressing water shortages in Gauteng.
SA currently has 48 billion cubic metres of water at its disposal but will need about 63 billion cubic metres by about 2030 if we want to create full employment.
Electricity and water are intertwined says energy expert, Chris Yelland.
Prof Turton says "We must start investing in recycling, recovering, recapturing, and reusing water. We're surrounded by oceans, and I’m extremely bullish on seawater desalination.”
Prof Turton says that the “simple reality is that, at a national level, I don’t see the ship being turned around easily, maybe in the next decade, if we’re lucky."
SA consumers based in Gauteng remain on their own a serious long-term risk we are facing.....
SARS issues tax alert for employers
Writing in BusinessTech, SARS has issued an alert reminding employers that the Employer Annual Reconciliation period is currently open and will close at the end of May 2024.
Employers in South Africa are obligated to deduct and declare the correct amount of tax from their employee’s remuneration each month and pay this over to SARS.
SARS warned that it would be coming after employers who fail their tax obligations. "It wants to make tax non-compliance hard and costly through, where necessary, hard enforcement—for example, court action, asset seizure, and criminal prosecution.”
The annual third-party (IT3) data submission season will also be closing on 31 May. IT3 reporting sees third parties, such as medical aid schemes, employers and banks, sending SARS certain prescribed data called “third party data.”
The data is sent to SARS in the form of tax certificates, which SARS then uses in their assessments of various taxpayers.
Read the full article here >
“Any person found guilty of non-compliance with one of these offences is liable, on conviction, to a fine or imprisonment for up to two years,” SARS said. This is one state department where compliance with the law is being pursued.
Talk to Us
We specialise in the provision of focused GRC consulting input on an informed basis, and in a manner that adds value to the enterprise.
Put succinctly: we can help; we know what has to be done.
Call us.
‘Navigating GRC’ is published as a weekly newsletter on LinkedIn.
?