Ah, for a pill to ease those festive pangs!
16 October 2012
Posted by: SAIT Technical
By Prof Matthew Lester (TaxTalk)
Executive summary (SAIT Technical)
Prof Matthew Lester writes about the effect of employees' tax on December bonuses and holiday spending in general.For more, see http://www.criticalthought.co.za/.
PLEASE, can a pharmaceutical company develop a "tax-saver pill”. Pop one on or about December 15 and wake up on January 2. Then we could sleep through the disappointment that follows the payment of 13th cheques and Christmas bonuses.
It's such a downer when employees' tax hammers these payments harder than the monthly salary.
Meanwhile, the family Christmas shopping list has grown all year. So it's off to the mall, and bonuses are blown before you can say "Ho, ho, ho,” or buy a bottle of rum.
Then follow the madding crowd to the beach. Fuel is up 30% on last year, there are more tolls, more camera traps, and the roadworks south of Bloemfontein are not finished. Then there's the heat and dust.
The coastal weather is dodgy in December. And the locals can't wait to make good a year's losses by skinning Vaalies for two short weeks. Business practices of "last year's stock at next year's prices” and "don't rush me, I'm a local” prevail.
When kids' Christmas expectations fall short, they bring along reinforcements to add a little peer pressure to see in the New Year rave. Yes, kids recover more VAT than the most prudent tax inspectors.
Just two days into the new year, with lingering hangovers and maxed-out credit cards, they obediently make the long schlep home. Then come the reports of break-ins back home, because the dog didn't do his job, or Eskom went off and the freezer went bad. Or the servants got locked up.
Many say it's cheaper in Mauritius - with better security and enough rum for a delirium tremens. Rubbish! It can't be done for less than R100000 a family in high season. How many South Africans can afford that if only 378000 earn more than R400000 a year pre-tax?
What's the reward for the breadwinners who shut up and pay the bill? Answer: the back-to-school list, including new designer sports kit, and a deposit on the semi-mandatory mid-year overseas school sports tour.
It is generally six weeks between the December and January paydays. No wonder crisis centres, psychologists, priests, drug dealers and divorce lawyers hit pay-dirt in January. Let's take a pill and sleep off 2012 at home. Then take a holiday later in the year.