Online shopping behaviour: consumers prefer a mix of online and physical shopping

According to, the number of internet users in South Africa increased by 1.7 million (4.5%) from 2020 to 2021.

Online shopping behaviour changed completely at the beginning of lockdown with more people choosing to buy online and now, with lockdown measures relaxed, most of them prefer a mix of online and physical shopping.

South Africa has an estimated 38.19 million internet users, who spend more than 10 a day online and 90.2% of them have searched for a product or service to buy, according to the second ODOmeter Index published by local e-tailer OneDayOnly to better understand South Africa’s online consumer behaviour.

Last year’s index showed that 68% of respondents had shopped online before the onset of the pandemic. There was general consensus that lockdown led to a marked rise in online shopping behaviour.

Now that lockdown levels are less strict, 33% of respondents are still primarily shopping online, while the majority (61%) are splitting their shopping between online and in store. Only 6% have started shopping predominantly in store again.

Who are online shoppers?
The index identifies shortfalls and trends in the industry, what the customer wants from an e-tailer and which areas of the online consumer journey can be reviewed to improve the user experience. The respondents in the latest survey almost doubled, with 9,000 people taking part, including active online shoppers, infrequent online shoppers and non-shoppers.

The vast majority of online shoppers were between the ages of 25 and 54, but this time round shoppers between the ages of 25 and 34 were down by 4%, while shoppers between the ages of 35 and 54 increased by 2%.

“Although this may look like the younger age group is shopping less, it is possible that this could be linked to the effects of the long-term lockdown. It could also indicate the 35-54 year old bracket is becoming more comfortable with making more frequent purchases online,” says OneDayOnly director Laurian Venter.

What do online shoppers buy?
Technology is the most popular purchase at 41%, followed by fashion at 39% and appliances 32%.

“What surprised us was that alcohol only drew a 25% response, while we saw a significant spike in online sales both during and after the booze ban. This indicates a potential growth opportunity in online alcohol sales,” says OneDayOnly digital and performance marketing manager Jessica van der Westhuyzen.

More time to shop
With more than a third of the respondents saying they spend more than three hours a day on the internet, it is clear their online shopping behaviour has also changed. Venter says people who spend a significant amount of time online, especially if they work from home for the foreseeable future coupled with more hours spent at home, count in favour of e-commerce.

More time on the internet creates an environment where it is easier for customers to shop because it is more convenient. It also creates the opportunity for the e-tailing industry to sell more essential, day-to-day items consumers would otherwise buy in a physical store.

These “supermarket” trends were also identified globally, with volumes increasing during second lockdown compared to the first lockdown.

How often do online shoppers shop?
Online shopping behaviour also changed in terms of how often people shop online. The survey indicated that most customers were returning to shop between once a week and once a month, up 3% from last year, with nearly two-thirds of the group falling into these brackets.

Preferred devices
According to the survey, 60% of respondents preferred to shop using their mobile phones. However, the team was surprised that online shoppers prefer websites to apps. Desktop preference sits at 36%, with only 4% of people saying that shopping on a tablet is their preference.

Why some people do not shop online
Although more people than ever before now have access to the internet and they have more choice online, some people will still not shop online, with 50% of the respondents saying security trust is the main detractor.

“This shows the importance of continually educating new users about the level of compliance and governance our business undertakes with our secure payment options and why we have various payment platforms available, says Van Der Westhuyzen.




The digital age does not cease to surprise with all kinds of new and interesting things with which we need to keep up in order to have a sense of comfort about how informed and prepared we are for a new world

Digital transformation, digital strategy, digital innovation and other terms which start with the word ‘digital’ seem to be emerging as the latest popular vocabulary in several business discussions today.

Some people cannot help but feel left out and uncool for not being able to use the word ‘digital’ in their daily conversations, because at times it appears as though almost everyone in the workplace is talking about all things digital. If you think you have heard it all, perhaps it is not a bad idea to consider yet another emerging term which may soon become the coolest thing to say in a strategy meeting. Brace yourself for the era of the ‘digital CFO’ and if you are a finance professional, it is probably best to incorporate this new terminology into your business vocabulary. What it means to be a digital CFO signals an interesting evolution of not only the CFO role but also the finance function in the 4IR.

The CFO role and finance function as a collective in any organisation is a key pillar for financial management and without this pillar, one could argue that the financial performance of an organisation would be inconsistently accounted for. A CFO is the strategic leader behind the financial management pillar and in the digital era, the CFO is increasingly required to acquire digital acumen. Digital acumen will assist a digital CFO in driving financial management with a relevant approach to change as enterprise value transitions from tangible to intangible data assets and financial information. To get a good grasp on what it means to be a digital CFO, it is probably best to have a high-level understanding of what digital acumen is and why it is important for a CFO to acquire digital acumen.

What is digital acumen?

Broadly put, digital acumen involves being up to date with the latest digital trends with a view of what the implications are for a business. Digital acumen also involves knowing how to use new technologies to innovate business processes for improved efficiency and organisational digital transformation.

Why is it important for a CFO to acquire digital acumen?

In a future-ready organisation, a CFO is at the centre of using insights from data analysis to drive financial performance and strategy. Extracting valuable insights from digital data requires a reasonable level of digital acumen that will enable the CFO to provide strategic direction which is more relevant in the digital era.

There is no rigid definition of what it means to be a digital CFO at this point in time because the CFO role is currently transitioning into a new normal of digital optimisation in various organisational functions. Digital transformation is challenging the status quo of operational efficiency and strategic management and these areas are accounted for in the financial management function of a business. In order to keep up with rapidly evolving business needs in the 4IR, a CFO is increasingly required to implement relevant innovation and continued risk mitigation to deliver better-informed decisions and dynamic financial performance. A digital CFO will most probably focus on specific frameworks which are currently driving financial digital transformation in organisations. These frameworks include:

Financial data security The digitisation of financial information requires measures that will safeguard the integrity and safety of data. The regulatory framework around data management and the growing risks associated with data breaches require not only the chief information officer but also the CFO of an organisation to implement and maintain a reliable approach to data security management.
Automation of processes through digital platforms More speed and accuracy are required to keep up with rapidly growing volumes and the fast-paced accumulation of digital information. Automated digital platforms are an applicable solution in this environment. Robotics process automation (RPA) is emerging as a great way to innovate around time-consuming and repetitive finance tasks. RPA can be used to record progressive steps that are followed to register financial information or prepare financial reports and statements. Receivables, cash management, payroll processing and invoice processing are some of the functional areas where RPA presents immediate benefits through automation of repetitive tasks.
Agility of processes and extended capacity through cloud infrastructure In a digital environment, it is important to have forward-looking processes and systems in place to address unpredictable growth in demand on business processes. Agile ways of work and cloud infrastructure make it possible for the digitalv CFO to plan functional tasks and cost-effectively invest in systems that will be accessible on a ‘pay as you use’ basis.

Proactive and predictive response through artificial intelligence (AI) AI is particularly useful in proactively identifying trends in information and using that to make predictions about the future. Financial performance forecasting and forward-looking measurement of performance targets can be done more accurately and efficiently with AI-enabled predictive models. This puts a CFO in a more empowered position regarding critical decision making about the financial future of a business. Machine learning as a function of AI also proposes the ability to mimic and replicate human tasks. Where possible machine learning may be a relevant application for financial report writing on behalf of a CFO.

Regulatory compliance and enterprise risk management through digitisation The regulatory landscape for statutory compliance, tax administration, fair competition, labour compensation and other legislative areas are becoming increasingly dynamic. The risk of high penalties and fines for non-compliance has become a high priority for CFOs, because this may adversely impact the going concern assumption in a business where the financial consequences are significant. Because of these challenges, a digital CFO would be an advocate for the digitisation of compliance processes for timely and accurate digital submissions to regulatory authorities.

As the digital CFO becomes more of a necessity with the evolution of the role in the digital era, it will be interesting to see how CFO job specifications will adapt to cater for this change. The finance function of the future may similarly become an area that is characterised by more digital processes and digital ways of work. In a future-ready environment, a CFO will be expected to work more closely with the chief information officer and the chief data officer. The CFO will need to have a deeper understanding of IT systems and data management and more synergies between the finance and data management functions will need to be explored.

In some corporate circles, the emerging changes in the CFO role and digitisation in the finance function may be spoken of as disruption which challenges the relevance of the traditional norm. On the contrary, this change is arguably a mere signal of ongoing evolution and improvement which is not a new phenomenon. The difference is that these changes as characterised by the 4IR are more rapid than ever before. If you haven’t heard of a digital CFO, consider this your first encounter with the term. If you are a CFO or finance professional, perhaps reflect on the organisational impact of the characteristics that currently define a digital CFO and digital finance function. Also, consider what this means for you in a future-ready environment.


Kevin Ssemwogerere CA(SA) is Digital Innovation Intrapreneur Lead, a keynote speaker and digital transformation and strategy consultant




Looking at how this year has started off, with the second wave of COVID-19 combined with restrictions imposed by government, small businesses will continue to suffer. It will thus come as no surprise if this upward trend in new business registration continues to rise in 2021.

Parallel to this, here is another important statistic − businesses today face more competition than ever. It has been reported that in 2015 the typical business had just 2,6 competitors. Today, that number has almost quadrupled, to 9,7.

Looking at these statistics on new market entrants and competition in combination, the obvious question then becomes how do you differentiate yourself in order to attract your target market.

This brings us to our topic today, which looks at a very important aspect to consider when starting your business, namely branding.

Building a brand is the key to unlocking growth and retention in your customer base and following. Here are a few things to keep in mind when you’re building one. Your brand should:

Tell a story SAICA is a great example of this. From a young age, the idea of a CA(SA) is that of successful business professional, hence we all aspired and worked hard to earn this designation. Be sure to keep in mind that the main character in your branding story should be your customer, not your product.
Start with meaning Stand for something meaningful: ‘Do beautiful business’ (Xero), ‘Beautiful food. Stunning environments’ (Tasha’s), ‘Impossible is nothing’ (Adidas). This is aptly described by Simon Sinek: ‘People don’t buy what you do, they buy why you do it,’
Show how Finish this sentence: ‘The best online shopping platform in South Africa is [blank].’ Most of us aren’t thinking anything other than Takealot. Takealot is consistent, efficient and convenient. Your dominant selling idea needs to be important, believable, and memorable to your market.
Be intentionally controversial (in a good way) Most social media messaging that ends up viral is controversial. We see this almost every day on social media. A good example of this is Nando’s, who have built a bit of a reputation over the years by being witty and controversial through some of their media content.

We asked Andile Khumalo CA(SA), who is an expert in the brand space, to share some of his thoughts on brand.

‘I think we need to start with a common understanding of what a brand is. My favourite definition is that a brand is “the perception that lives in the minds of consumers”. This perception then influences the consumer’s decision to either buy or not buy a product or service.

‘So, branding is the science and art of creating a particular perception in people’s minds about your product or service. But the truth is that a brand is built or destroyed
by every interaction that consumers have with your company, your product and your people.

‘I would say that entrepreneurs need to pay more attention to the experience that customers have with their companies, their products and their people – starting with the entrepreneur themselves. If people’s interaction with you is positive, you are building a good brand. If the interaction is negative, you are building a bad brand.

‘It’s really that simple.’

If you found this content helpful, drop us a quick review at the end and look out for next month’s issue of ASA where we will be looking at the power of entrepreneurial skills development.


This month’s tool is a game-changer for all small business owners called ‘getlion’.
Mathew Marsden, co-founder of getlion, gives us a little more insight: ‘getlion is Africa’s leading, end-to-end mobile application for entrepreneurs to start and grow their businesses and access learning content, tools and services. Apply for funding and increase your revenue through the country’s first all-in B2B marketplace. Best of all, getlion is the first application to reward entrepreneurs for running their businesses the right way.’

Some exciting news: SAICA Enterprise Development has recently formed a collaboration with the IAAE team to assist their SMMEs on a national scale with our financial excellence offering.

The beneficiaries are undergoing a gap analysis and full diagnostic assessment following which we are carving out a development plan for each SMME. Still early days in this fruitful collaboration!

If you would like to collaborate with SAICA Enterprise Development, be sure to have a look at

If you found this piece useful, be sure to let us know:

  • Tell us about your TOP TECH TOOL that can benefit small business.
  • Tell us about your small business that can help our readers as part of the SMALL BUSINESS SPOTLIGHT.
  • Any other feedback.

Jameel Khan, Head of Projects, SAICA Enterprise Development



ECONOMIC WEEK AHEAD: Trade balance and producer inflation in focus

The trade surplus is forecast to be R28.3bn in March, riding high on the continued buoyancy of commodity prices

SA’s trade balance data is likely to be the highlight this week, along with the release of producer price inflation, which picked up in March as a result of higher fuel prices.

Elevated commodity prices and the continuous recovery in the global demand for manufactured goods are expected to have lifted SA’s export performance, helping the country register yet another trade surplus, according to Investec economist Lara Hodes.

The trade surplus is forecast to come in at R28.3bn in March, according to a Bloomberg median forecast, easing just slightly from a surplus of R29bn in February. The SA Revenue Service (Sars) will release the trade balance data on Friday.

Perceptions of a rebound in the global economy from the Covid-induced setback have boosted demand for commodities such as platinum group metals, which are used to clean the emissions of internal combustion engines.

Commodity prices have significantly risen since the second half of 2020 in particular, though they have since stabilised at elevated levels.

“So far this year, mineral sales have become even more rampant, with a further increase of more than 25% over the 2020 figure. To put the value of mineral sales of R120bn during January and February into perspective, it is equal to the total output of the agricultural sector in 2020,” according to independent economist Roelof Botha.

“A direct consequence of the sterling performance of the mining sector is a handsome cumulative trade surplus for January and February, namely more than R41bn. An indirect consequence that has an important bearing on the future direction of monetary policy is the impact on the value of the rand exchange rate.”

The rand has been particularly strong against the dollar, breaking below R14.20/$ for the first time in 15 months in mid-April before pulling back to R14.25 by Friday. The stronger rand has the potential to keep a lid on inflation, which rose to an annual rate of 3.25% in March, from 2.9% in February, though it was below the 4.5% midpoint targeted by the Reserve Bank.

The benign inflation outlook could encourage the Bank to keep interest rates at the record low of 3.5%, to help the economy recover from the ravages of Covid-19.

Stats SA will release the producer price index (PPI) for March on Thursday. It is likely to have accelerated to an annual rate of 4.6% in March, from 4% in February, according to a Bloomberg median estimate.

Hodes said: “A key contributor to the March outcome is likely to be the petroleum category, which comprises 19.56% of the PPI basket. A higher rate of inflation in the petroleum category is expected on the March fuel price increases of 65c/l and 56c/l for petrol and diesel, respectively. Additionally, low statistical base effects will serve to buoy the year-on-year inflation rate.”

Private sector credit extension data for March will also be released on Friday by the Bank.

There is a possibility that private sector credit extension contracted 0.2% year on year in March, after rising by an annual rate of 2.6% in February, she said.

“The expected contraction is ascribed to strong statistical base effects in the corporate credit category, which constitutes over half of total credit extension and so the impact is meaningful.”




How can auditor independence be enhanced and the audit market be deconcentrated and transformed? Victor Sekese elaborate.

The recent reported global and local corporate governance failures have put a spotlight on auditors and their role in the financial reporting process.
Furthermore, the revelations at the Zondo Commission have accentuated public debate on the role of auditors. This discourse is complicated by a general misunderstanding of the role of auditors − the so-called expectation gap.

The public expects auditors to identify and report fraud and malfeasance taking place at auditees. Auditors, on the other hand, claim that the current framework within which they operate is not designed to identify all fraud and wrongdoing. They also argue that other role players in the corporate governance ecosystem also need to take accountability in the event of corporate failure.

The auditors’ arguments have not succeeded in changing the public narrative and sentiment towards the audit profession. There is therefore a need for intervention to address this situation and most importantly to prevent future corporate governance and audit failures.

The question is, what needs to be done. In 2017, The Independent Regulatory Board for Auditors (IRBA), against fierce opposition from some stakeholders, introduced mandatory audit firm rotation (MAFR). With effect from 2023, all public interest entities (PIEs) must rotate their audit firms after every ten years, with a five-year cooling period before they can be considered for possible reappointment.

The MAFR policy was introduced because of a concern by IRBA that long-term audit tenure negatively impacts on auditor independence. Auditor independence and objectivity are pivotal in the auditing process and have a direct impact on audit quality. Auditors who are not independent may overlook irregularities and omissions in the financial reporting process, thereby compromising audit quality and devaluing financial statements. To enhance audit quality, auditor independence therefore needs to be maintained and improved.

The primary objective of MAFR is to improve audit quality through strengthening auditor independence by limiting auditor tenure to ten years.

According to IRBA, as of April 2020, 25% of the JSE-listed entities had rotated audit firms since the announcement of MAFR in 2017. Future studies will be required to test the efficacies of the MAFR policy.

The stated secondary objective of MAFR is to reduce audit market concentration and achieve racial transformation. IRBA, however, acknowledges that MAFR policy will not achieve the secondary objectives of reduction of audit market concentration and achievement of transformation on its own. Additional policy instruments are therefore necessary for the achievement of these objectives.

This formed the subject of my recently completed research paper in part fulfilment of the requirements of a public policy master’s programme. I share in this article some of the key findings of my research.

The objective of the research was to identify additional policy interventions necessary to address market concentration and transformation of the audit profession in South Africa.

It is common knowledge that the audit profession is dominated globally and locally by the Big 4 accounting firms. In many global jurisdictions, the audit market has arguably assumed an oligopolistic form. Regulators are therefore concerned about the negative effects of this market structure as espoused by economic theory. Also, they are particularly concerned about the systemic risks that the structure presents. They have thus been, for a long time, contemplating various policy instruments to change the market structure to be more inclusive and broader.

My study participants acknowledged that many factors are contributing to the concentrated audit market structure, which is not limited to the audit profession but extends to other industries as well. They nevertheless unanimously agreed that policy interventions are necessary to deconcentrate the audit market.

The European Commission (EC), in response to the concerns above, in 2010 released comprehensive proposals for reforming the European audit market in a green paper titled Audit policy: lessons from the crisis’. The objective of the green paper objective was to enhance the audit regulatory framework to improve audit quality.

Following the public consultation process on the green paper, final regulations were promulgated in 2014 through a European Parliament audit directive.

The EC 2010 green paper proposals were varied and included mandatory audit firm rotation, mandatory joint audits and the appointment of auditors by an independent body. The latter two were not carried through to the final regulations promulgated in 2014.


Appointment of auditors by an independent body

Several scholars argue that the current system of appointment of auditors is flawed. Auditors are expected to always act in the interest of the public. Audit firms are, however, private enterprises with a profit motive. Their commercial interests, scholars argue, are in conflict with public interest objectives.
Furthermore, they argue that the current process of appointment of auditors compromises auditor independence. Auditors are appointed by shareholders on the recommendation of the board, particularly the audit committee. However, in practice, executives and the board are very influential in auditor appointment and shareholders rarely vote against their recommendations. In essence, auditors are appointed and remunerated by executives and the board and yet they are accountable to a much wider group of stakeholders including shareholders, lenders, employees and government agencies. The current process thus contains an embedded conflict of interest for auditors.

Scholars therefore recommend a framework similar to one once considered by the EU 2010 green paper, namely appointment of auditors by an independent body. This, they argue, will address conflict of interest challenges and enhance auditor independence.

There is however limited global precedence of the application of the framework. Germany has partially applied the framework for cooperatives and savings banks.

This model is currently being considered in the UK and India. The UK Competition and Markets Authority (CMA) study recommended that the model be revisited in future should other interventions not achieve the objectives of changing the audit market structure.

The consultation paper issued by the government of India in 2020 is considering possible enhancements of audit independence and accountability and recommended the appointment of auditors by external authorities like the Comptroller and Auditor-General of India, a body equivalent to the Auditor-General of South Africa (AGSA).


Infrastructure and capability of the AGSA

The infrastructure and capability of the AGSA can be used to achieve the objectives of further enhancement of auditor independence, diversifying the audit market by expanding participation of non-Big 4 firms and transformation of the audit profession through supporting black-owned firms.

The AGSA is mandated through the Public Audit Act to audit the state, state organs and state-owned companies. The act also empowers the AGSA to use privately owned audit firms in the execution of its mandate. The AGSA has thus implemented a well-functioning system, the Contracts Work Committee, through which it allocates its work to private audit firms.

South African regulators can consider extending the mandate of the AGSA to cover non-state public interest entities, or they can assign the responsibility to appoint auditors of specified PIEs to the AGSA. The AGSA as a credible Chapter 9 institution will ensure that the objectives of public interest are maintained at all times. This will reduce the risks of future audit failures. Furthermore, the audit firm allocation framework will ensure an equitable share of audits that will encourage wider firms’ participation and transformation through the participation of black firms.

This proposition was not supported by my study participants, however. Various arguments were advanced against the proposition including that the framework is not aligned with free-market principles, challenges relating to accountability, possible bureaucratic inefficiencies, and risk of capture by audit firms.

I believe there is merit in further exploring this and other possible models that will be effective in changing the audit market structure and achieve BBBEE objectives of enabling the emergence of viable, sustainable black-owned audit firms. Experience has proved that the market cannot self -correct − regulatory intervention is necessary to rectify market structure deficiencies.

AUTHOR | Victor Sekese, Chief Executive of SNG Grant Thornton and board member of Grant Thornton International



Disclosure – The pathway to corporate reporting reform

Corporate reporting has undergone, and continues to undergo, substantial changes, upgrades, advances, and methodological enhancement. The nature and scope of reporting today has had a paradigm shift compared to forty years ago.

In the 1980s, there were essentially three elements to corporate reporting. An income statement which focused on profitability, a balance sheet which focused on solvency and a cashflow statement that concentrated on movements in cash and essentially working capital. The associated disclosure too was relatively narrow. Notes to the balance sheet provided reconciliations to the amounts per the balance sheet and were more of a substantiated calculation rather than any type of analysis. Predominantly the disclosure focus was on investors and lenders.

Today, 40 years later, we have disclosure requirements more akin to a thesis, rather than a set of accounts. This is because of the transition from a predominantly single stakeholder view, to that which is necessary for a far broader stakeholder view.

The nature of corporate reporting has shifted fundamentally from a set of predominantly historical reporting accounts to a balanced set of accounts that combine analysis of the period under review with a forward-looking focus. From an IFRS perspective, required disclosure includes the anticipated future recovery of assets, including leased assets (Right of Use) and various financial instruments. Disclosure around liabilities include the anticipated settlement thereof (lease liabilities, financial liabilities). As we know, one cannot fully anticipate what the future may bring. For this reason, detailed disclosure around key judgement areas and assumptions are vital.

The above is especially relevant as the global community is still grappling with the impact and uncertainty that Covid–19 has brought, and will continue to bring for the foreseeable future, until herd immunity is reached not just at a local or national level, but at an international one too. This requires management insight, assumptions to be made, models to be predicted and stress-tested. To enhance the corporate reporting environment then, detailed disclosures surrounding these need to be made. This requires then not just a quantitative approach to disclosure, as was historically the case, but a qualitative approach too. Preparers are required to bring users of corporate reports into their confidence and almost provide a behind-the-scenes view around the results and sustainability of the entity. The only way that this can happen is through a process of transparent and informative disclosure.

The word sustainability was used deliberately in the above paragraph. Sustainability reporting is fast becoming a significant focus area. The future of corporate reporting lies in a multi-stakeholder approach to reporting. A system of reporting that discloses not only the financial performance and position at a point in time and over time, but societal performance too. Disclosure around the entity’s contribution towards climate, towards the environment, towards its customers, employees and stakeholders are crucial too. Simply put, without a broad range of stakeholder analysis and transparency, corporate reporting will not be effective. Environmental, Social and Governance (ESG) reporting is indeed far broader than simply a climate focus or an environmental focus, but rather a corporate reporting practice that represents risks and opportunities that will impact a company’s ability to create long-term value. This includes environmental issues like climate change and natural resource scarcity. It covers social issues like labour practices, product safety, and data security. And it involves governance matters that include board diversity, executive pay, and tax transparency.

ESG reporting and disclosure, combined with a robust set of annual financial statements entrenched in the principles of International Financial Reporting Standards (IFRS) cumulatively will produce an annual report that will truly represent the value of an entity and its related citizenship. The higher the levels of disclosure, the more transparent the disclosure, the wider the global reach of the disclosure, then the deeper its impact will be. This is a significant step required to regain user and stakeholder confidence and continue to reform corporate reporting, both locally and globally. The detail and transparency lies within the depth and breadth of its disclosure.




The process of financial emigration, which is the process that allows a taxpayer to formally place themselves on record as a non-resident for tax purposes with the South African Revenue Service (SARS), recently changed and came into effect on 1 March 2021.
Jonty Leon, Legal Manager (Expatriate Tax) at Tax Consulting South Africa, says the company has seen an increased volume of inquiries regarding the benefits of financial emigration, the new process, as well as the timelines involved in financial emigration.

“The advantage of financial emigration is that it allows you to cleanly cease tax residency of SA, ensuring your foreign income and foreign assets are ring-fenced outside of SARS’ jurisdiction. Financial emigration used to be a tax and exchange control process, but the new process means that financial emigration has become solely a tax process. The exchange control process created an additional set of administrative challenges with financial institutions, which is no longer the case. Under the new financial emigration regime, there are no disadvantages for those who intend to reside outside of the country permanently,” says Leon.

In-depth audits and proving non-residency

As SARS will no longer be able to tax an individual on their worldwide income and assets once they have ceased tax residency of SA, the institution has ramped up its collection power to ensure the taxpayer has truly met the requirements to cease tax residency. This translates to more in-depth audits from SARS to ensure these taxpayers meet the criteria of non-residency.

“For many years, South Africans abroad have flown under the radar. Many expats are still of the opinion that they are no longer liable to pay tax in South Africa if they have been abroad for many years. It is important to note that the process is not automatic, and the burden of proof always lies with the taxpayer. SARS now has a team dedicated to investigating and recovering tax from South Africans abroad who have not ceased their tax residency in South Africa,” says Leon.

Steps involved in financial emigration

The individual seeking financial emigration must be entirely up to date and compliant with SARS. This compliance extends to any South African trusts or companies that they are linked to, which must also be fully up to date and compliant.

The taxpayer must then pass two tests to determine tax residency outside of South Africa, namely the Physical Presence test and the Ordinarily Resident test.

After this, they can submit an application with full supporting documentation to SARS for an Emigration Tax Clearance Certificate. The application will include an “exit tax” that is calculated on certain worldwide assets as well as a declaration of all South African assets and liabilities. Only once this has been audited and approved by SARS can the taxpayer consider themselves a non-resident for tax purposes.

Leon concludes by advising people to partner with a reputable tax advisory firm with experienced, admitted attorneys in their team. “Taxpayers must follow the most transparent, formal route to financially emigrate to ensure a taxpayer can overcome their burden of proof when ceasing tax residency.”

Source: FA News


Some South Africans who have bought cryptocurrencies in recent years are being audited by the South African Revenue Service (SARS), who has sent them letters requiring more information about these investments.
Last month, SARS commissioner Edward Kieswetter confirmed that undisclosed cryptocurrency holdings will be a big area of focus for the tax agency this year.

Some taxpayers have received audit letters that request that they provide reasons for their cryptocurrency investments, and provide letters from trading platforms confirming the investments, says Thomas Lobban, legal manager for cross-border taxation at Tax Consulting SA.

The cryptocurrency platform Luno, which has seven million trading “wallets” (or accounts) in South Africa, confirms that it has seen an increase in requests from South Africans to download their transaction histories, presumably for tax purposes.

“Luno does not provide tax certificates to users because calculating tax on bitcoin earnings requires the consideration of multiple factors and is not straightforward,” Marius Reitz, Luno’s general manager for Africa, told Business Insider. The platform says while it is relatively simple to download a transaction history from its site, these are not “SARS-ready” documents. It is working on making the process more user friendly.

Asked whether SARS has approached Luno for details about its users, Reitz replied: “Luno does not share customer information with SARS on a routine or ongoing basis.”

Contrary to what many traders and investors believe, cryptocurrency investments can be tracked and traced with the correct expertise and resources, warns Lobbon. Bank transfers by a taxpayer to a cryptocurrency platform can be traced, and SARS is building technical expertise to allow other sleuthing capabilities. “Remember, technology does not forget and once you have clicked on even a cryptocurrency ad, your digital footprint is already there,” says Lobbon.

SARS has already included questions about cryptocurrency investments in the capital gains tax portion of tax returns, creating source codes for cryptocurrency-trading profits (2572) and losses (2573) respectively.

“This means that there is no room for a taxpayer to manoeuvre in light of non-disclosure in their returns,” says Lobbon.

What must be declared?

All cryptocurrency transactions must be declared – not only if you cashed out.

If you bought any cryptocurrency, or exchanged cryptocurrency for another cryptocurrency, it must be declared on your tax return. You must also state if you mined cryptocurrency. And SARS is very clear that you need to declare it if you were in any way paid in cryptocurrency.

How will my income from cryptocurrency be taxed?

SARS doesn’t view cryptocurrency as a currency.

If you made money from your cryptocurrency investment, it can either be taxed as income, or attract capital gains tax. This depends on whether you are an active trader in cryptocurrencies, or are investing for the long run.

If you were paid for your services in cryptocurrency, this will considered to be remuneration for tax purposes and is subject to normal tax,

How much tax will I pay?

If you are found to be a short-term investor or trader in cryptocurrencies, you will pay tax at your personal income tax rate (which can be upwards of 40% if you earn more than R782,200 a year). For longer-term investors, capital gains tax (18% for individuals) is payable.

How will I be taxed if I mine cryptocurrencies?

This is not clear, says TaxTim.

“SARS provides little guidance on how you will be taxed if you mine your cryptocurrency. The assumption is that the crypto earned through mining will automatically be seen as trading. The stick in the mud is that it can also be seen as capital gains depending on your intention on your cryptocurrency.”

What are the penalties if I don’t disclose cryptocurrency income?

Taxpayers who fail to correctly disclose their cryptocurrency-related income or comply with an audit request by SARS may be convicted for an offence and be liable to a fine or imprisonment for up to two years, says Lobban.

If found guilty of gross negligence, a taxpayer could face penalties more than double the owed amount, plus interest. And if found guilty of tax evasion, the penalties could be more than triple the original amount.

What should I do if I haven’t declared my cryptocurrency holdings over recent years?

Contact the SARS voluntary disclosure programme (VDP), which offers more favourable penalty amounts than if you were to be found guilty. The unit can be contacted directly at

Source: BusinessInsider

SA’s CEOs optimistic about global economic growth

One year after Covid-19 was declared a pandemic, CEOs are voicing record levels of optimism in the global economic recovery, with 76% of global business leaders predicting that economic growth will improve in 2021. Coming off of a global recession (3.5% decline in world GDP) and a GDP contraction of 7% in SA, a record share of CEOs are optimistic about global economic growth this year.
The figures come from PwC’s 24th Annual Global CEO Survey, which this year polled 5,050 CEOs in 100 countries and territories over January and February 2021.

The percentage of CEOs expressing confidence in growth is up from 22% in 2020 and 42% in 2019, representing the highest level of optimism since the survey started asking this question in 2012. In South Africa, 57% of CEOs believe global economic growth will improve over the next 12 months.

South African CEOs are also more optimistic about the outlook for their businesses. Some 41% (compared to 36% globally) of those polled said they are “very confident” about their organisation’s prospects for revenue growth over the next 12 months.

Commenting on the survey results, Dion Shango, CEO of PwC Africa says: “After a year of economic and political uncertainty coupled with human tragedy, it is encouraging to note an upswing in sentiment among CEOs about global economic growth. Although we are not out of the woods, CEOs see a path forward – for the global economy and for their own organisations.

“As business leaders prepare for a rebound in the economy, a critical question will be: which management approaches should business retain from the rapid response mode most of them adopted during 2020?

“Fast, high quality decision-making is likely to continue to be top of most companies’ ‘keep’ lists. Other priorities include ensuring top management remain focused on the big issues that matter most, engaging with all staff, revisiting critical decisions frequently, and responding early to unintended consequences.”

Industries were affected in different ways by Covid-19, as lockdowns and other restrictions changed the way we work, live, travel and shop. This disparity is reflected in confidence levels, both in our survey results and in our interviews with CEOs. It is notable that CEOs globally in the technology and telecommunications sectors show the highest levels of confidence at 45% and 43%, respectively. Meanwhile, CEOs in the transportation and logistics (29%) and hospitality and leisure (27%) sectors are among the least confident about their ability to grow revenues over the next 12 months.

US extends its lead over China as the top destination for growth

The survey findings show that the US has extended its lead as the number one market that global CEOs are looking to for growth over the next 12 months at 35%, seven percentage points ahead of China at 28%. In 2020, the US was only one percentage point ahead of China.

New political developments and existing tensions have had an impact on the views of US CEOs. They are reducing their emphasis on China as a growth driver and increasing their focus on Canada and Mexico: compared to 2020, US CEOs’ interest in the latter two countries rose by 78%. Meanwhile, China CEOs report growing interest in large economies such as the US, Germany and Japan — prime destinations for exports.

At 17%, Germany holds on to its number three spot on the list of growth destinations, while the UK, post-Brexit, moves up to number four (11%), surpassing India (8%). Japan also rises up the ranking to become the sixth most attractive growth destination, overtaking Australia which held that position last year.

South African companies continue to see China (27%) and the UK (27%) as key to growth, but are also looking to other African countries for opportunities — Ghana (11%), Nigeria (11%) and Kenya (8%).

Headcount of talent

In view of South Africa’s rising inequality and employment challenges, it is concerning that 51% of SA CEOs (compared to 37% globally) report they have reduced staff in the last 12 months and that 41% (compared to 21% globally) plan to do so in the year ahead. The proportion of South African CEOs expecting to reduce staff has exceeded those expecting to increase it for the first time — and by a margin of 25 percentage points. This is unprecedented in the history of the survey. The survey findings are based on the economic outlook at the time — namely, a level 3 lockdown period, issues arising from the rollout of vaccinations, as well as load shedding.

Only 16% — compared to 42% in 2020 — of local businesses expect to increase their headcount over the next 12 months. Forty-three percent of organisations (compared to 35% globally) expect their headcount to remain the same.

Opportunities for growth

We’ve seen in previous surveys that when the operating environment gets more difficult, CEOs focus on areas in which they can have a direct impact while limiting risk. Operational efficiencies (South Africa: 89%; Global: 77%) and organic growth (South Africa: 70%; Global: 73%) top the list of CEOs’ actions planned to drive growth. In addition, 41% of South African CEOs (compared to 38% globally) also intend pursuing mergers and acquisitions, while 35% of CEOs both in South Africa and globally are looking for a new strategic alliance or joint venture.

In the year of COP26, climate change is not being approached with urgency

The percentage of global CEOs expressing concerns about climate change has risen from 24% in 2020 to 30% in 2021. This represents only a marginal increase in the context of COP26, which is being held this year in Glasgow, UK. The finding also comes in the context of rising anxiety about nearly all types of threats.

Climate change still only ranks ninth among CEOs’ perceived threats to growth. Furthermore, another 27% of CEOs report being “not concerned at all” or “not very concerned” about climate change. This may be because climate change is not seen as an immediate threat to growth compared to other issues such as the pandemic, over-regulation and cyber threats.

It is notable that 27% of South African CEOs report not being concerned about climate change; and 49% of CEOs (Global: 60%) have not factored it into their strategic risk management activities.

At a country level, CEOs in countries with high exposure to natural hazards such as India and China are some of the least prepared for climate change risk.

Shirley Machaba, CEO for PwC Southern Africa adds: “The Covid-19 pandemic has provided the world with a real opportunity to make a change and realise governments’ ambitions to transition from a low carbon global economy. This has provided South Africa with an opportunity to achieve its ambition of achieving a just transition to a low carbon economy as set out in the National Development Plan (NDP). This opportunity was also recognised by the Government at the virtual High-Level Meeting of the United Nations Sustainable Development Goals Moment in 2020.”

Threats to growth

Not surprisingly, pandemics and health crises top the list of threats to growth prospects, overtaking the fear of over-regulation, which has been the perennial number one concern for CEOs globally since 2014. Among South African CEOs concerns about the impact of unemployment on their companies’ growth prospects have risen four places (South Africa: 73%; Global: 21%) to become the top threat to business growth.

Other top threats to growth for South African CEOs are: inadequate basic infrastructure (South Africa: 65%; Global: 19%), uncertain economic growth (South Africa: 59%; Global: 35%), and volatile energy costs (South Africa: 57%; Global: 18%). South African CEOs are significantly more concerned about threats than their global peers. So, while pandemics and other health crises are recognised as the leading threat globally, with 52% of CEOs stating they are extremely concerned, in South Africa this threat only rates third – even though 65% of are extremely concerned about it.

Rising digitisation is increasing the risks posed by cyber threats. This, coupled with the significant increase in cybersecurity incidents in 2020, including ransomware attacks, has resulted in cyber threats leaping up the list to become the number two concern, with the level of concern jumping from 33% to 47% globally, and from 22% to 49% in South Africa. Cyber threats are a concern particularly for CEOs in North America and Western Europe, where they are considered a greater threat than the pandemic.

In 2020, tax policy uncertainty ranked outside the top ten concerns for CEOs, with only 19% of CEOs concerned. This year, it has increased rapidly in importance, leaping up to seventh place (31%), with CEOs undoubtedly watching government debts accumulate and realising that business taxes will likely need to rise.

In South Africa, 32% of business leaders “strongly agree” that tax policy changes to address rising government debt levels will increase their respective organisation’s tax obligations.

Around the world, misinformation also rose rapidly from 16% in 2020 to 28% of CEOs in 2021 being extremely concerned, likely due in part to the impact of misinformation on elections, reputations, and public health. With 27% extremely concerned, this threat doesn’t feature in South Africa’s top ten, but we will continue to track it in subsequent surveys.

When asked which threats are explicitly factored into their strategic risk management activities, South African CEOs are significantly more responsive than their global peers about managing threats — most notably around skills shortages, cyber threats and the pandemic and health situation.

People and productivity

South Africa’s CEOs are prioritising productivity through automation and upskilling (South Africa: 49%; Global: 36%) with a greater focus on workplace culture and behaviour (South Africa: 43%; Global: 32%). There is also more emphasis on diversity and inclusion (South Africa: 24%; Global: 25%).

Machaba comments: “Upskilling or reskilling employees to enable their full participation in the workforce means creating more inclusive and sustainable economies and societies that pull people along and catalyse deeper connections between humanity and the economic marketplace.”

Digital investments for the future

Asked about their spending on digital transformation, nearly half of CEOs (49%) project significant increases of 10% or more. Despite the rising level of concern CEOs are voicing about cyberattacks, this has not translated into definitive actions. Less than half of the CEOs planning for heightened digital investment are also planning to boost their spending on cybersecurity and data privacy by 10% or more.
More than half of South African CEOs (59%) plan to pursue greater cost efficiencies and increase their rate of digital investment by 10% or more.

While many CEOs are planning to reduce their workforces and focus on technology to drive growth in their businesses, it is heartening that 49% globally are also planning to increase spending on leadership and talent development.

Shango concludes: “Looking at the survey findings we see an opportunity emerge – a moment for business leaders to take a step back and ask how we can do things better. Although the shape of the recovery remains unknown, we cannot go back to the way things were before. To bring about the change that is needed, company leaders will need to think differently and constantly evaluate their decisions and actions against broader societal impacts.



5 lessons for finance & accounting in 2021

Chief financial officers and finance and accounting (F&A) teams are under immense pressure to reduce costs, optimise processes, and enhance revenue, especially after the rollercoaster ride that was 2020 and how it reshaped the F&A space during an unprecedented financial year.


The F&A function was lagging behind in terms of timely adoption of new technologies due to large-scale reliance on legacy systems and practices.

However, with the Covid-19 pandemic and all the uncertainties resulting from it, we witnessed the F&A function taking a giant leap towards discarding old-school processes to embracing everything new. To drive this point further, a survey reported that 67% of accountants preferred cloud accounting over regular, on-premise solutions. Such trends mark a new and welcome chapter in the history of F&A.

While CFOs and F&A decision makers have spent most of the past 14 months trying to brainstorm, firefight, and solve novel challenges, 2021 will undoubtedly throw unexpected questions their way, especially from a long-term strategic perspective.

1. To automate or not to automate?

Industry experts and tech solution providers have been harping on the fact that automation is indispensable for organisations that want to be future ready. That era of automation adoption is finally here.

A vast majority of repetitive tasks and rules-based transactions, which consume numerous man hours, will now be automated. This includes tasks like invoice processing, vendor inquiries, payments execution, supplier registration, payments reconciliation, and so on.

Finance functions that have already implemented automated processes in place before the pandemic managed the phase better than those saddled with legacy processes. Today’s finance leaders are evaluating and applying technologies such as intelligent automation, robotic process automation, and cloud computing for better productivity and to improve their bottom line.

2. The sun is shining on the cloud

Cloud computing in the finance and accounting sector delivers faster access to data, promotes transparency, and prevents data siloes. The cloud accounting software market is expected to grow at a CAGR of 8.5% until 2025. It is not surprising that cloud adoption has become a priority for the accounts function.

Secure document storage, seamless access to files from anywhere in the world, and a hybrid, collaborative approach are cloud-enabled capabilities that organisations strive to achieve.

3. Learn, upskill, collaborate

The F&A specialist is expected to go beyond traditional accounting. CFOs and finance leaders should ensure that select new hires and existing team members are well-versed in strategic technologies such as data science, cloud computing, and blockchain, along with better communication and decision-making skills. Resources like Gartner’s skill gap assessment map out must-have digital finance competencies.

To amplify productivity and cut costs, the accountant of tomorrow must embrace flexible roles and develop a holistic focus for the organisation. The C-suite can encourage and lead by example in this digital upskilling.

On the other hand, CFOs can benefit from collaborations with seasoned outsourcing consultants. For instance, F&A outsourcing from Infosys BPM could go a long way in standardising and automating processes without having to expend time and effort in extensive training.

4. Work from home is here to stay

Remote work became the norm during the pandemic because of worldwide lockdowns and restrictions. For F&A professionals, this meant taking all their daily work home and ensuring there are no snags in the process. Of course, the transition came with challenges in employee engagement and productivity, but leaders soon realised that this is a highly effective working arrangement, with a potential to extend it for a longer term.

To enable effective remote working, F&A leaders must stay committed to providing the best technology tools and support, keeping individuals engaged and motivated, and empowering people to make decisions at their levels. The hybrid model (working from home and occasionally working from the office) has seen many takers and will continue to be an efficient system in the near future.

5. Help, my laptop is under attack

From leaking customers’ personal information to compromising highly-sensitive financial data, cyberattacks are a high-stakes concern for every F&A leader.

The FBI reported a 300% hike in cyberattacks from the beginning of the pandemic. With organisations determined to ensure their virtual presence, unscrupulous hackers have found more room to exploit existing loopholes. It is critical that CFOs and CPA heads ensure multi-faceted protection of F&A data in the age of remote work.

While the hybrid model of work is the way forward in many ways, F&A functions must increase the focus on data privacy and protection. Apart from ensuring two-factor authentication and VPN policies, organisations must invest in relevant staff training, real-time risk management, and regular security audits (third party) to quash potential threats.

Moving forward, an agile, adaptive, and resilient F&A function is what business leaders must help create.

With digital disruption arriving at the core of accounting processes, CFOs must consider strategies that include the right mix of tech adoption, re-skilling and upskilling, and partnerships in F&A outsourcing to streamline and synergise finance processes and enable F&A teams to create a positive and ever-lasting transformation.