POPIA (The Protection of Personal Information Act) is Now Law and the Clock is Ticking

Globally, governments are responding to the vast amounts of information flooding into the public domain due to the growth in companies like Amazon, Facebook and Twitter. As much of this information is personal, POPIA seeks to regulate how this personal information is processed and stored.

South Africa, like many countries, has a constitutional mandate to protect the right to privacy and POPIA is aimed at balancing this right with the necessity of processing personal information – employee salaries is an example.

With the Act now in effect, you have a twelve-month grace period to comply with POPIA. By 1 July 2021, all entities that process personal information need to be in compliance with the Act.

This has substantial implications for business and will be costly and time consuming to implement.

A brief overview

  • Firstly, what is personal information?  POPIA defines this as including:
    • a person’s name (including a juristic person such as a company),
    • contact details,
    • religion,
    • sexual orientation,
    • personal views,
    • private correspondence,
    • health records,
    • employment records,
    • financial records,
    • biometrics (DNA, fingerprints)
  • There are eight self-explanatory principles which govern the Act:
  1. Accountability
  2. Processing limitation
  3. Purpose
  4. Further processing limitation
  5. Information quality
  6. Openness
  7. Security
  8. Right of access
  • Further restrictions apply for the use of “special personal information” like political affiliation or sexual orientation.
  • A regulatory body known as the Information Regulator has been established with the following powers and duties:-
    • Search and seizure powers
    • May impose administrative fines
    • May sue on behalf of the subject
    • Can decide if the law is being complied with
    • Receives and acts on complaints
    • May issue notices

It is a criminal offence to make false statements to, or to not comply with notices from, the Regulator.

  • The appointment of an Information Officer. In terms of POPIA this is deemed to be the head of the organisation, such as the CEO or sole proprietor. The person may delegate this to another person. The Information Officer is to register with the Regulator.

    The role of this position is to encourage and ensure compliance with the Act, to handle queries from outside the organisation on matters relating to POPIA, to liaise with the Regulator and deal with whatever has been prescribed.
  • POPIA makes provision for cross-border uses of personal information
  • In terms of direct marketing, there is a clause requiring opt-in. This is contrary to current laws where the norm is to require opt-out. This means permission must be sought from people whose information will be used, prior to direct marketing taking place.  The only exception is in respect of existing customers/clients.

This transition period is going to be onerous on businesses. They need to determine what information falls into the Act, how it is used, protected, stored, who has access to it.  Businesses will also need to get the relevant consents from staff and other stakeholders. What privacy statements do you need to make, what protocols do you need to put in place over your information and website?

As there are onerous penalties (a fine of up to R10 million or ten years imprisonment) and these requirements concern the safety of your staff’s (amongst other) information, so it is well worth investing time and taking advice to start getting the right procedures in place now.

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Protecting your Company’s Reputation When Staff Work from Home

The number of staff working from home has surged with the lockdown, and many office-based employers now plan to keep most or all of their employees working remotely for the long term. There are of course many advantages to allowing those staff members who can work effectively from their own home offices to do so, but be aware also of the business risks that this “new normal” exposes your company to.

One of these is the increased risk of reputational harm to your business, particularly whilst the pandemic and its economic fallout continue to threaten staff morale and uncertainty is the watchword of the day. We analyse those risks and suggest some positive steps you can take to address them.

It takes a lifetime to build a good reputation, but you can lose it in a minute.

Will Rogers

Whilst many employees enjoy working from home, this is a time of uncertainty for them. They read of people being retrenched or furloughed and wonder if they are next. The isolation of working from home can fuel this uncertainty.

Yet it is these employees who daily interact with customers and other stakeholders. If staff have negative feelings about the company, this can be quickly picked up by customers. Social media can spread this quickly and suddenly management have to start undertaking damage control. Recently, an English business decided to not pay staff until the government’s wage subsidy kicked in. Following an outcry, management swiftly reversed this and paid the staff. Contrast this with Quickbooks who kept their cleaning staff on full pay despite empty offices and L’Oreal have made a point of paying small suppliers quicker than usual.

Don’t think short term

The decisions you make send out signals to your staff and they are much more likely to view you favourably if you are showing fairness to your stakeholders.

Think also of your investors – they tend to support businesses where carefully considered long-term decisions are made by management. Don’t forget having a holistic outlook and making the environmental, social and governance (ESG) criteria part of your strategies.

Communicate effectively

In a recent case, staff supported management putting them on furlough after they were persuaded by management that this was the best long-term strategy to preserve jobs in the business.

Staff are more motivated if they know they have commitment and active support from their bosses.

IBM have started a program of supporting employees who need to take out time to educate their children or look after family members. They have also encouraged their staff to raise any individual difficulties they have with their managers. Introducing this type of flexibility makes managers’ jobs harder to do and IBM have created separate online chat channels for managers to network with their peers and find solutions to employees’ problems.

Other companies with diversity in the workplace have openly supported Black Lives Matter and have made sure that when there are pay cuts or retrenchments, there is no discrimination against minorities.

The world has changed and become more uncertain and more flexible. You need to plan carefully and act to ensure you stay on top of the situation and keep the support of your staff.

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Talk to your Tax Practitioner before accepting SARS’s new auto-assessment

Last month the South African Revenue Services (SARS) announced the mass roll-out of its auto-assessment of taxpayers earning salaries, but as many tax and accounting practitioners have already discovered, this may deny clients lawful and valid claims.

SARS Commissioner Edward Kieswetter announced the mass roll-out of auto-assessment, which he said would alleviate the administrative burden on his staff. But comments from several tax practitioners cast doubt on the advisability of accepting auto-assessments from SARS.

Many tax practitioners are advising their clients not to blindly accept the auto-assessment from SARS as they may lose out claiming valid additional deductions or worse, not declare all their income, which is an offence and may land them in hot water. 

The SA Institute of Business Accountants (SAIBA) CEO, Nicolaas van Wyk, stated that, “practitioners have an ethical responsibility to inform their clients of their taxpayer rights and responsibilities. All income must be declared and all valid deductions such as travel, medical, office expenses must be claimed. Tax practitioners must ensure that taxpayers receive the best advice and guidance so that they only pay the correct amount of tax and claim all the deductions they are allowed. The auto-assessment does not necessarily capture all this data correctly”.

In August 2020, SARS will be implementing an auto-assessment to some individual taxpayers. Taxpayers may receive an SMS if they are selected to be auto-assessed. Essentially this means that SARS attempted to complete your tax return based on third party data alone (such as IRP5, medical, investments). The intention is to save costs of filing and streamline the process. However taxpayers must still ensure they agree or declare all income and expenses. They need a tax practitioner for this.

“SAIBA urges taxpayers to contact their tax practitioner first before accepting the auto-assessment”, says van Wyk. 

Tax practitioners are duty bound to act in the best interest of their clients. This means carefully reviewing their tax affairs to ensure they can claim all allowable deductions and disclose all relevant income. In this way they make sure their clients claim or are refunded the legally appropriate amount, and not what SARS says you must pay.

It may be safer for some taxpayers not to accept the auto-assessment but rather file tax returns (as before) from the 1 September. Doing so will prevent the following scenarios from happening:

  • Potentially no/or a reduced tax refund because SARS doesn’t have all the client data
  • Potential errors as SARS may not have the latest tax certificates from the employer
  • No ability to claim tax deductions which will not appear on your auto-assessment e.g. medical expenses, donations, home office, wear and tear, etc.

SAIBA’s regional head for the West Rand, Grant Richardson, says the auto-assessment could infringe on taxpayer rights. “There are several problems we have encountered with the auto-assessment. For example, travel allowances do not distinguish between business and private travel. That information must be input manually into the system, otherwise you will get an incorrect allowance and therefore pay too much tax. There are other areas that will also result in the auto-assessment throwing out a figure which is to the benefit of SARS, but not to the client.”

SAIBA members and practitioners point to several areas where the auto-assessment is throwing out incorrect assessments based on wrong data. These include allowable deductions for Retirement Annuity contributions, interest income and medical expenditure which may not be detailed on IRP5 forms. These must be manually entered in order to avoid a tax overcharge by SARS.

Tax filing dates

The new filing dates for the 2020 tax filing season, which cover income/expenses from 1 March 2019 to 28 February 2020, will be as follows:

  • Salary earning (non-provisional) taxpayers who file online: 1 September 2020 to 16 November 2020
  • Provisional taxpayers who file online: 1 September 2020 to 31 January 2021
  • Branch filers (By Appointment): 1 September 2020 to 22 October 2020.

Should you like assistance with submitting your tax return, contact us at ep@emmapardoe.co.za.  

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