Edition: December 2015 / February 2016
Editorials

GRAVY

I put the following questions to SARS: A few years ago I bought a house, as my own residential property to be used by myself and my family, for R3m. A few years later the company that employs me – I happen to be its executive chairman – spent R30m on improvements to it.

Is the R30m tax free or am I liable for tax at my maximum marginal rate? What are the consequences if I haven’t declared the R30m as deemed income?

In the unlikely event that I get answers from SARS, my next question will be whether the same law applies to all taxpayers.


So long as government scratches for money, which will be long indeed, it will be looking for new revenue sources (like a prescribed-assets imposition on pension funds, not for infrastructure investment but to fund current expenditures) and new taxes (like a wealth tax, not to “reduce inequalities” but to fund current expenditures).

Better to ensure first of all that what’s already owed is promptly paid; like Nkandla, whose owner (and the public) will get no rest until it is. The local government elections are upon us....


Talking about the President, who isn’t too keen on the Public Protector, his attitude towards her is reminiscent of the retort by Stalin when it was suggested to him that the support of the Pope be enlisted to fight the Nazis.

“How many legions has he got?” asked the master bully.


In its corporate governance statement, the newly-listed Sygnia financial services group makes much play of its compliance with corporate governance “principals”.

The start would have had more polish – no, not Polish – had it known how to spell the word.


Be that as it may, the Sygnia pre-listing statement shows the 2015 remuneration of well-photographed executive Magda Wierzycka (she of the long blonde hair) at a relatively modest R3,9m inclusive of a R900k bonus. But modesty tells only part of the story.

Magda beneficially owns 84,6% of Sygnia. On the group’s JSE listing in October, the value of her shares stood at over R1,4bn. She should worry if it makes multi-manager rivals turn grey.


Given this windfall, watch for strengthened competition in the multi-manager space. In particular, watch for developments at Discovery.


In the old apartheid dispensation, a Cape Town businessman classified as ‘Coloured’ told his accountant (classified ‘White’) that he wouldn’t pay tax for so long as he was a second-class citizen. Come the demise of apartheid and the accountant called the businessman to say that he no longer had an excuse for not paying tax.

“On the contrary,” responded the businessman. “We’re now both second-class citizens.”