Axis Consulting

19/08/2020

5 ways outsourcing can save your struggling business

It has been more than four months since South Africa joined the rest of the world and entered a national lockdown to try to curb the spread of the coronavirus. Since then a series of socio-economic events have unfolded with more than 3 million people facing unemployment and numerous companies, especially Small Medium and Micro Enterprises (SMMEs) closing. South Africa was already in a technical recession before the lockdown, but the shutting down of industries further exacerbated economic woes, with the unemployment rate now sitting at 30.1%.

Businesses seeking to survive the economic downturn have been forced to research and implement innovative methods. One approach that has produced tangible results both internationally and on local grounds is that of outsourcing.

Outsourcing offers multiple benefits to companies looking to survive the current pandemic and beyond, grow their business offerings or streamline costs by saving money. More organisations are turning towards outsourcing solutions. In 2019, the outsourcing market, (business process outsourcing) was worth around R1.3 trillion ($92.5 billion) according to Statista, having clocked in at R1,2 trillion ($85.2 billion) in 2018.

Arnoux Maré, Managing Director of Innovative Staffing Solutions makes the case for outsourcing by highlighting the methodology’s 5 benefits.

Outsourcing saves money and cuts costs, furthermore, according to Deloitte, it allows managers/employers to focus on their core business functions. This allows management to play a more strategic role by concentrating on other crucial aspects, such as operations and the financial growth of the business rather than having to deal with routine issues and activities.

Entrepreneurs must wear multiple hats in their businesses, but the truth is, no-one can do everything, especially now when most companies have had to reduce their staff complement. Outsourcing solves business-related capacity, such as filling in roles that a company may not have in-house. It gives businesses access to a skilled talent pool that would otherwise be beyond their reach to assist them in attaining their organisational goals.

Some of the top challenge’s businesses face include hiring new employees; increasing profits; employee healthcare; growing revenue and managing cash flow. Through outsourcing, companies can eliminate two of those challenges; the need for hiring employees and providing them with healthcare. For example, Innovative Staffing Solutions provides all its employees with medical aid and provident fund. They also take over skills development; disciplinary hearings and payroll management, which bolsters their clients’ profits; revenue and cash flow.

When businesses outsource their functions and staff, they are quicker to innovate, which improves their customer experience and can decrease their prices of service delivery thus making them more competitive.

When businesses outsource their operational needs to an outsourcing partner like Innovative Staffing Solutions, they gain the proficiency of labour relations experts that bring years of experience to complex outsourcing projects. This leads to an increase in productivity and efficiency in the process thereby contributing to the organisation’s bottom-line.

“In a business environment characterised by a fluctuating market, downgraded economic conditions, high unemployment rates, skills shortages and labour unrest, more and more companies are seeing the wisdom of choosing to outsource as the best survival and growth strategies in their business toolkits,” concludes Maré.

23/07/2020

9 Future of Work Trends Post-COVID-19

As the pandemic resets major work trends, HR leaders need to rethink workforce and employee planning, management, performance and experience strategies.

The coronavirus pandemic will have a lasting impact on the future of work in nine key ways. The imperative for HR leaders is to evaluate the impact each trend will have on their organization’s operations and strategic goals, identify which require immediate action and assess to what degree these trends change pre-COVID-19 strategic goals and plans.

32% of organizations are replacing full-time employees with contingent workers as a cost-saving measure

“It’s critical for business leaders to understand that large-scale shifts are changing how people work and how business gets done,” says Brian Kropp, Distinguished Vice President, Gartner. “HR leaders who respond effectively can ensure their organizations stand out from competitors.”

Human Resources
9 Future of Work Trends Post-COVID-19
Implications and actions for HR leaders as COVID-19 drives shifts in the future of work.

Of the nine future of work trends, some represent accelerations of existing shifts; others are new impacts not previously discussed. And in some cases, COVID-19 has forced the pendulum of a long-observed pattern to one extreme.

No. 1: Increase in remote working
A recent Gartner poll showed that 48% of employees will likely work remotely at least part of the time after COVID-19 versus 30% before the pandemic. As organizations shift to more remote work operations, explore the critical competencies employees will need to collaborate digitally, and be prepared to adjust employee experience strategies. Consider whether and how to shift performance goal-setting and employee evaluations for a remote context.

No. 2: Expanded data collection
Gartner analysis shows that 16% of employers are using technologies more frequently to monitor their employees through methods such as virtual clocking in and out, tracking work computer usage, and monitoring employee emails or internal communications/chat. While some companies track productivity, others monitor employee engagement and well-being to better understand employee experience.
Even before the pandemic, organizations were increasingly using nontraditional employee monitoring tools, but that trend will be accelerated by new monitoring of remote workers and the collection of employee health and safety data. Make sure to follow best practices to ensure responsible use of employee information and analytics.

No. 3: Contingent worker expansion
The economic uncertainty of the pandemic has caused many workers to lose their jobs and exposed others for the first time to nonstandard work models. Many organizations responded to the pandemic’s economic impact by reducing their contractor budgets, but there has since been a shift.
Gartner analysis shows that organizations will continue to expand their use of contingent workers to maintain more flexibility in workforce management post-COVID-19, and will consider introducing other job models they have seen during the pandemic, such as talent sharing and 80% pay for 80% work.

“Our research finds that 32% of organizations are replacing full-time employees with contingent workers as a cost-saving measure,” says Kropp. “While gig workers offer employers greater workforce management flexibility, HR leaders will need to evaluate how performance management systems apply to these workers and determine whether they will be eligible for the same benefits as their full-time peers.”

No. 4: Expanded employer role as social safety net
The pandemic has increased the trend of employers playing an expanded role in their employees’ financial, physical and mental well-being. Support includes enhanced sick leave, financial assistance, adjusted hours of operation and child care provisions.

Some organizations supported the community by, for instance, shifting operations to manufacturing goods or providing services to help combat the pandemic and offering community relief funds and free community services.

The current economic crisis has also pushed the bounds of how employers view the employee experience. Personal factors rather than external factors take precedence over what matters for organizations and employees alike. Employing such measures can be an effective way to promote physical health and improve the emotional well-being of employees.

No. 5: Separation of critical skills and roles
Before COVID-19, critical roles were viewed as roles with critical skills, or the capabilities an organization needed to meet its strategic goals. Now, employers are realizing that there is another category of critical roles — roles that are critical to the success of essential workflows.

To build the workforce you’ll need post-pandemic, focus less on roles — which group unrelated skills — than on the skills needed to drive the organization’s competitive advantage and the workflows that fuel that advantage. Encourage employees to develop critical skills that potentially open up multiple opportunities for their career development, rather than preparing for a specific next role. Offer greater career development support to employees in critical roles who lack critical skills.

No. 6: (De-)Humanization of employees
While some organizations have recognized the humanitarian crisis of the pandemic and prioritized the well-being of employees as people over employees as workers, others have pushed employees to work in conditions that are high risk with little support — treating them as workers first and people second.
Be deliberate in which approach you take and be mindful of the effects on employee experience, which will be long-lasting. Address inequities if remote and on-site employees have been treated differently. Engage task workers in team culture and create a culture of inclusiveness.

No. 7: Emergence of new top-tier employers
Prior to COVID-19, organizations were already facing increased employee demands for transparency. Employees and prospective candidates will judge organizations by the way in which they treated employees during the pandemic. Balance the decisions made today to resolve immediate concerns during the pandemic with the long-term impact on the employment brand.

For example, advise CEOs and executive leaders on decisions regarding executive pay cuts and make sure financial impacts are absorbed by executives versus the broader employee base.
Progressive organizations communicate openly and frequently to show how they are supporting employees despite the implementation of cost-saving measures. Where feasible, look for opportunities to arrange talent-sharing partnerships with other organizations to relocate employees displaced from their jobs by COVID-19.

No. 8: Transition from designing for efficiency to designing for resilience
A 2019 Gartner organization design survey found that 55% of organizational redesigns were focused on streamlining roles, supply chains and workflows to increase efficiency.
While this approach captured efficiencies, it also created fragilities, as systems have no flexibility to respond to disruptions. Resilient organizations were better able to respond — correct course quickly with change.
To build a more responsive organization, design roles and structures around outcomes to increase agility and flexibility and formalize how processes can flex. Also, provide employees with varied, adaptive and flexible roles so they acquire cross-functional knowledge and training.

“D&I leaders will need to be involved in role design and creation of flexible work systems to ensure that employees of all backgrounds and needs are considered when the organization designs new workflows,” said Ingrid Laman, Vice President, Advisory, Gartner.

No. 9: Increase in organization complexity
After the global financial crisis, global M&A activity accelerated, and many companies were nationalized to avoid failure. As the pandemic subsides, there will be a similar acceleration of M&A and nationalization of companies. Companies will focus on expanding their geographic diversification and investment in secondary markets to mitigate and manage risk in times of disruption.

This rise in complexity of size and organizational management will create challenges for leaders as operating models evolve.
Enable business units to customize performance management, because what one part of the enterprise needs might not work elsewhere. As organizational complexity complicates career pathing, providing reskilling and career development support — for example, by developing resources and building out platforms to provide visibility into internal positions.

Gartner

28/06/2020

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06/05/2020

Another challenged SOE in trouble. Can Telkom re-position itself to become more relevant?
Telkom is in deep trouble.
Its fixed-line customers are leaving in droves, it has a serious reputation problem, and its debt burden has increased to worrying levels.
In its latest trading statement, Telkom warned that its earnings per share are expected to decrease by 30% to 40% compared to last year.
This decline in earnings, Telkom said, is due to a “significant increase in net finance charges and fair value movement of between 120% to 130% from R443 million reported in the prior year”.
The company added that the increase in finance charges largely relates to increased borrowing in support of the investment in its mobile business.
Telkom’s share price fell over 10% following the news. The latest decline means that Telkom’s share price has fallen from around R100 to R64 per share over the last five months.
This is a clear indication that the investors have lost trust in Telkom and expect things to get worse.
Investors concerned about debt
Many investors and analysts were taken by surprise by Telkom’s announcement, saying it was unexpected and did not contain enough information about the poor financial performance.
Stakeholders highlighted that Telkom’s debt is reaching worrying levels, questioning whether the company accurately assessed the finance charges related to this debt.
“The market is very disappointed with the result. We see debt up 28% year-on-year, which is a problem,” said Momentum Securities CEO Steven Schultz.
He explained that a lot of this debt is related to Telkom’s investment in its mobile network, and because the company borrowed lots of the money it needed, financing costs are ramping up.
Wayne McCurrie from FNB Wealth and Investments called Telkom’s trading update “very poor”, adding that the company is trying to compete in a saturated environment.
He said Telkom relies on its roaming agreement to offer a decent service, which means its only competitive advantage is price.
This “race to the bottom” is good news for consumers but puts tremendous pressure on Telkom’s bottom line.
Excelsia analyst Mark Narramore questioned Telkom’s strategy, saying it was spending money with cashflow which it does not have.
Narramore highlighted that Telkom’s share price has been declining over the last four months and that he anticipates the company to be downgraded.
Big decline in fixed-line subscribers
One of Telkom’s biggest challenges is the rapid decline of its fixed-line and DSL subscriber base.
Over the last five years, Telkom’s fixed-line subscribers declined from 3.5 million to 2.3 million, and this trend is accelerating.
In the last six months, the company lost a record 299,000 fixed-line subscribers, which means it is now losing around 50,000 subscribers each month.
What is even more concerning is the decline in ADSL, VDSL, and fibre customers. Telkom’s ADSL, VDSL, and fibre subscribers declined from 981,176 in March 2018 to 847,650 in March 2019.
This is by far the biggest decline in ADSL, VDSL, and fibre customers Telkom has ever seen, and equates to losing over 21,000 customers every month.
This decline comes at a time when there is a very strong demand for fibre-to-the-home services in South Africa.
Telkom once dominated the fixed-broadband market, but fibre network operators like Vumatel, Octotel, and Frogfoot have eroded its market share.
Telkom seems to have accepted its fate as a me-too player instead of dominating the fibre market by cutting its investment in this space.
The company decreased the capital expenditure on its fibre network from R2.112 billion in its 2017/2018 financial year to R1.216 billion in 2018/2019.
Poor reputation
Another big problem for Telkom is its poor reputation, which makes it difficult to attract new fixed-line subscribers.
Years of poor customer support making it difficult to cancel services, and billing customers who have cancelled services have alienated many of its former subscribers.
Telkom consistently ranks as the worst company and Internet service provider in MyBroadband’s consumer satisfaction polls. It is, therefore, no surprise that Telkom is losing customers.
The company often tries to downplay the impact of its poor reputation on subscriber numbers by shifting the blame to changing market conditions and increased competition.
Telkom’s competitors, however, are showing great growth in areas where Telkom should dominate. This shows that Telkom is failing where others succeed.

More competition than ever before
As a former monopoly, Telkom has been struggling to cope with competition in the fixed-line market, but this is not stopping. In fact, competition is increasing.
There has been a rapid increase in fibre network operators in South Africa, all of which are eating into Telkom’s fibre-to-the-home and fibre-to-the-business market share.
Fixed wireless products, including MTN and Vodacom’s fixed-LTE offerings and Rain’s new 5G service, are also putting pressure on Telkom’s fixed-broadband business.
And then there are Vodacom and MTN’s big data bundles, which offer exceptional value for high-end smartphone users.
Telkom will have to continue to offer aggressively-priced products to remain competitive, which in turn puts pressure on its business.
With Telkom betting big on mobile and relinquishing market share in the fixed-broadband and corporate market, it is facing an uncertain future.
It needs to avoid the situation Cell C finds itself in, but how it will grow without taking on more debt is not clear.

06/05/2020

SAA - It may be better to collaborate on a regional basis where resources are pooled rather than throw more money at another loss-making entity??

Ethiopian Airlines ready to be saviour to fellow African carriers says it’s open to conversations around SAA.

Ethiopian Airlines Group is prepared to come to the rescue of stricken carriers around Africa, even as the continent’s biggest airline deals with its own mounting losses and grounded planes due to the Covid-19 pandemic.
Talks are underway with the government of Mauritius about the revival of the island nation’s state carrier, which was put into administration last month, Ethiopian chief executive officer Tewolde GebreMariam said in an interview on Tuesday. And while there are no negotiations currently taking place with South Africa, the CEO would be open to a conversation about that country’s bankrupt national airline, he said.
“The Mauritian government is thinking of restarting that business with Ethiopian Airlines,” Tewolde said. “We are at the initial point of the discussion to see what kind of partnership or joint venture it will be.”
The global airline industry has been thrown into an historic crisis by the coronavirus outbreak, which has led to the grounding of almost all aircraft as governments close borders. African carriers haven’t escaped the bloodbath, with Ethiopian set to lose almost $1 billion in ticket sales over its fiscal year to end June, according to the CEO.
South African Airways is out of cash and in the middle of a tug of war between government, unions and administrators over its future. Kenya Airways, part of a regional ‘big three’ with Ethiopian and SAA, has requested state assistance to see it through to a time when the airline can fly again.
SAA revival
Ethiopian last held discussions with South Africa’s government about SAA in early January, the CEO said, and the carrier would be willing to take part in a proposed revival of the national airline. SAA’s administrators have given labor groups until Friday to agree to severance packages for the near 5 000-strong workforce, but Public Enterprise Minister Pravin Gordhan has said he’s still exploring funding options that may involve private entities.
“We think we can approach them and restart the discussion with the new airline,” Tewolde said.
© 2020 Bloomberg
Samuel Gebre, Bloomberg / 6 May 2020 07:06

06/05/2020

Worth a listen.

A bed time story of how it started, and why hindsight’s 2020. 🛌 🧸 Music by Katie Phillips / Sound Design by Sam Gee Facebook: Probably Tomf...

04/09/2019

Ageing in the world – the implications
2nd September 2019 by Editor
*This content is brought to you by Orbvest
By Hennie Bezuidenhoudt*
Ageing, or to be more specific, the slowing of ageing, is a situation that has far reaching and serious implications on a global scale. The elderly population is growing and are, simply put, living to a much healthier and ‘riper’ old age.
Hennie Bezuidenhout and Martin Freeman
The facts are there. Life expectancy has increased by 27 years since 1841 and the average age in the USA will increase to 120 plus by 2050. For those who like to think in terms of percentages, the percentage of the USA population aged 65 and older will rocket from around 13% recorded in 1980 to 23% by 2050. This is within just 70 short years.
What causes ageing?
Perhaps the cause of ageing is a good place to start to analyse what is changing and why. Environment and cellular processes cause damage to our genes and chromosomes and telemores gradually wear down. Over time, environmental factors change how DNA sequences are read and implemented – and proteins no longer function as they should resulting in cancers and neurological disorders.
Chronic illness results when mitochondria, our cellular power plants, no longer perform and as cells age they cause inflammation. The reduction of stem cells (up to 10,000 fold) is a major factor contributing to our no longer being able to regenerate or repair the body or its organs. Finally the disrupted communication mechanisms of cells decreases our ability to transmit information between them.
What is changing?
All sounds like bad news doesn’t it – but as I have written in previous articles, thanks to incredible technologies and advances in medical science, many of these degenerative issues and causes are being addressed and reversed. AI (Artificial Intelligence) and all its spin offs, have contributed to the decline of the cancer mortality rate by 27% over just the last 25 years.
Smart devices generate real-time data about patients and allow them to report their own subjective symptoms more accurately. These are all possible through IoMT (Internet of Medical Things), which integrates personal digital devices, connected medical devices, implants and other sensors.
See how you can invest in special medical real estate
Stem-cell technology is able to help cartilage and other parts of the body to regrow, so operations on joints could become a thing of the past. Most amazing of all is that whole body parts may be able to be reproduced through 3D printing.
What are the implications?
So is it good news or bad? Is the fact that we are on the brink of being able to literally build a bionic man or prolong the life of a human being indefinitely, a plus for humanity, or will it create challenges beyond man’s capabilities to solve?
It is a big subject and has big implications.
We currently lose more of the world’s population to infectious and parasitic diseases, but this will change – and Dementia, Alzheimer’s and all age related chronic diseases will become the primary causes of death.
This implies that we will naturally need far more specialist healthcare workers, particularly in the field of geriatrics. In fact it is estimated that 36,000 geriatricians will be needed in the United States alone by 2030.
Cost too will be a major issue, especially for governments, who could be overburdened by unprecedented medical coverage expenditure. Medicare coverage, currently available in many countries to senior citizens above 65, will most likely be changed and possibly have to be compromised.
Finally this also means that medical care and healthcare facilities will not only have to be extensive, but will need to change in their very nature.
What are the solutions?
Many solutions are being sought and the primary solutions will come in the form changing the nature of healthcare and healthcare facilities.
Care for the aged currently contains a massive grey area of frail care, palliative care, preventative care and a myriad of others. This will all be streamlined into healthcare residential facilities that offer home care and home hospitals.
Orbvest is at the cutting edge of investments being made in the healthcare facilities of the future. Projections show that healthcare could become the number 1 favourite sector of real estate investments in the USA occupying some 56%.
The implications of the extended lifespan of most of the world’s population are as previously stated, numerous, challenging and expensive. There is however, light at the end of the tunnel… and a very much extended, better life to be enjoyed by all.
• Hennie Bezuidenhoudt, chairman, Orbvest

04/09/2019

Prepare to get hit by NHI funding in six years
2nd September 2019 by Chris Bateman
When it comes to how the NHI will hit your pocket, here’s a piece of advice; “don’t hold your breath; it will take six years.” That’s what emerged during the Hospital Association of South Africa conference last week at which nervous hospital group executives and the bigger medical aid scheme CEO’s grilled National Health Department Deputy Director General, Dr Anban Pillay about the NHI during a panel discussion. We heard how the NDoH is going to clean up its dysfunctional primary health care and referral systems while universal health care is implemented in stages, with the highly-disputed draft bill definition of (private medical aid) ‘complementary funding,’ aimed at kicking in around 2026. That’s when you will no longer enjoy the full basket of private medical aid-funded care. The bigger private funders like Discovery think (hope?) the basket won’t be almost empty. This story outlines where and how your pocket will get hit – and here I’d recommend some stomach muscle toning because it’s a gut punch which an ever-diminishing number of taxpayers will have to take. It’s not that this group begrudges helping out, but with a government still riven with corruption, misusing public funds and largely unaccountable, it tends to stick in the craw. – Chris Bateman
South African taxpayers will bear the brunt of National Health Insurance
By Dr Lee-Ann Steenkamp*
South Africa’s government recently released the National Health Insurance (NHI)Bill whose aim is to extend universal healthcare to all South Africans.
But the Bill has sparked a great deal of controversy. The impact on private health care, quality of service and the government’s ability to manage such a complex system have been widely questioned.
One of the toughest questions being asked is: how on earth will it be funded?
The memorandum on the objects of the Bill explains that the NHI will be financed in various interrelated phases as determined in consultation with the National Treasury. Costing estimates vary from the health department’s “guesstimated” R259bn last year, to the Institute of Race Relations calculation of R450bn.
National Treasury is currently doing the costing exercise. It has said it will release more information at a later stage.
What’s known about the funding proposals can be gleaned from the Bill itself. These four proposals target the same low-hanging fruit, namely income tax.
The four sources
Source 1: Existing tax revenue: This pool of general tax revenue includes funds currently directed to the provincial health departments (the so-called “provincial equitable share” and “conditional grants”).
The main public health funding stream consists of around R150bn per year, which would be tapped for the NHI. The memorandum notes that this shifting of funds would occur in one of the later phases, and would require amendments to the National Health Act of 2003. It would also be dependent on how functions are shifted from provincial to national level; for example, if central hospitals were brought to the national level.
Source 2: Scrapping medical scheme tax credits: This entails the reallocation of funding for medical scheme tax credits paid to various medical schemes towards the funding of the NHI. In other words, the current tax relief provided for by the medical tax credits would fall away. The impact on, for example, a family of four, would amount to just over R12 000 per year. This means that the tax owing to SARS would increase by about R12,000 per year for the main member of the medical scheme.
Calculation of medical scheme tax credit = (R620 + R209 + R209) x 12 months = R12,456.
Source 3: Payroll tax on employeer and employee: The memorandum envisages that the payroll tax will be “small”. The Bill does not, however, quantify its “smallness” – or indeed, the magnitude.
In my view this payroll tax is in essence a tax on labour and productivity. For example, the payroll tax would inevitably result in reduced earnings or, worse, job losses.
Source 4: Surcharge on personal income tax: The Bill does not contain any information regarding this surcharge, other than that it would be charged on an individual’s taxable income. This extra tax on taxable income could be viewed as a penalty (or disincentive) for increased productivity and wealth – yet another reason why some might participate in the silent tax revolt.
Despite not knowing the percentage of additional tax that might be levied, it is important to look at the number of taxpayers who will have to bear this additional tax. This metric is called the tax base.
The tax base
The country has a narrow tax base, defined as the number of individuals who were assessed for personal income tax. This is not to be confused with the number of registered individual taxpayers, which has increased by 4.9% from 2016/17 to 2017/18. The increase may be ascribed to the revised employee registration process which was introduced by the South African Revenue Service in 2010.
This process requires employers to register all individuals and issue them with a tax certificate, regardless of the amount of income earned. However, many of these taxpayers fall below the tax threshold and are thus not assessed. They are also not liable for the tax employers deduct from salaries and wages and hand over to the South African Revenue Service.
Conversely, the number of taxpayers actually assessed (or taxed) showed a sharp decline. In the 2013/14 tax year, a total of 5,991,934 individuals were assessed. This figure dropped to 4,898,565 individuals assessed in 2016/2017. The tax base therefore shrunk by about 18.2% from 2014 to 2017.
Read also: NHI a vast cost to taxpayers, will undermine healthcare system – IRR
In contrast, the personal income tax burden shouldered by these individual taxpayers has increased. This can be expressed as the average personal income tax paid per assessed taxpayer. In the 2013/14 tax year, the tax burden amounted to R45,702. This burden expanded to R65,601 in 2016/2017, representing a whopping 43.5% increase from 2014 to 2017.
The overall result is that relatively fewer taxpayers have to carry an increasing burden of tax collections. Given the country’s poor economic outlook, credit rating downgrades, high unemployment figures and the myriad of social grants paid to millions of dependent individuals, it is clear that the tax base is already severely strained.
The NHI will simply add to this burden.
Social solidarity
The Bill attempts to make the extra tax burden more palatable by saying that the money will be collected “in accordance with social solidarity”. This is an interesting phrase used by the drafters of the Bill. “Social solidarity” is a concept that was developed by the Frenchman Émile Durkheim in the late 1800s. Its core principle is that of collective action and enabling individuals to feel that they can enhance the lives of others.
The social solidarity envisaged by the memorandum is that of income cross-subsidies between “the affluent and the impoverished”. All well and good, until one considers that the payment of taxes is not a voluntary action done for the wellbeing of others. It is a legal obligation imposed by the State on its citizens. Social solidarity, therefore, implies a sense of altruism. A duty to pay income tax can hardly be said to be an act of selflessness.
Read also: Making sense of the NHI and your future medical costs – money expert Dawn Ridler
Of course, what probably offends most taxpayers is not the communist undertone of social solidarity, which harks back to “from each according to his ability, to each according to his needs”. Rather, it is the sense of frustration with a government rife with corruption, the widespread misuse of public funds and the brazen lack of accountability. The NHI funding proposals may very well be perceived as adding insult to injury for the 4.9 million individuals paying personal income tax.
It is somewhat of a relief that (according to the memorandum) tax options will only be evaluated as part of the last stage of implementation. Hopefully, the National Treasury will do a full impact analysis and take into account the economic and fiscal environment prevailing at the time.
• Dr Lee-Ann Steenkamp, Senior lecturer in taxation, University of Stellenbosch Business School (USB), Stellenbosch University. This article is republished from The Conversation under a Creative Commons license. Read the original article.