22 Mar SwissFin – SwissSure Newsletter March 2022
We welcome you to our first Newsletter for 2022.
We are very excited to announce that Swiss Financial Consulting CC (“SwissFin”) is celebrating its 30th birthday this year. We would like to thank all our clients, some of them that have been with us from day one, for your loyalty and support over the last 3 decades. We have always strived to be close to our clients, to deliver personal and trustworthy service. We are looking forward to being of service to you for many years to come!
The budget speech by our finance minister and some insights in the economic challenges of our country fill the headlines of this newsletter. As usual, we have included information for you across the board regarding insurance, immigration, taxation and other related topics.
This newsletter can be viewed under https://www.swissfin.co.za/newsletters/swissfin-swisssure-newsletter-march-2022/.
Enjoy the reading, with best regards,
Your SwissFin / SwissSure – Team
Your SwissFin / SwissSure – Team
- Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates
2. LOCAL AND INTERNATIONAL FINANCIAL NEWS
4. SWISSSURE: SHORT-TERM INSURANCE NEWS
- Old Mutual Insure Emergency App
- Important announcements for Renasa policyholders
- Western Insurance deletes medical cover
- Understanding SASRIA cover on commercial policies
- SASRIA rate increases are being implemented
- War in Ukraine leads insurers to exclude cover
- Important points on car rentals via your insurer
- Insurers extend driver licence’s grace period
- Santam / H&L amends Business Interruption extensions
- Department finally issues Critical Skills List
- New court date for our Class Act
- Foreign graduates may find it difficult to stay in South Africa
6. HEALTH INSURANCE
- New options to renew your vehicle licence
- Conversion of foreign driver licences
- Ramaphosa relaxes Covid rules – but not state of emergency
- We value your comment
Interest rates: Bank deposits, insurance plans, tax-free investment amounts and our foreign exchange rates >>
SwissSure offers the following rates as of March 2022:
Interest rates ››
- Our Money Market Fund
- 12 Months bank deposits
- 24 Months bank deposits
- 36 Months bank deposits
- 60 Months bank deposits
Minimum investment is R 100’000. Terms and conditions apply and the rate is dependent on the investment amount.
Insurance Plans: “Guaranteed income/growth plans” (5 year term), approx. 80% of the income is tax-exempt: ››
- Gross yield
- Taxes payable
Tax-free interest income – maximum investment amounts: ››
R 2,57 Mio. for taxpayers under the age of 65
R 3,89 Mio. for taxpayers between the age of 65 and 75
R 4,25 Mio. for taxpayers over the age of 75
These figures mean that you can invest these amounts in i.e. our money market or fixed deposit offerings and not pay any tax. Couples married in community of property can double these amounts!
Underlying assumptions: 4,0 % effective interest rate and no other income sources.
SwissSure Forex Rates ››
- Bank A
- Bank F
- Bank N
- Bank S
- Our Rate
The above table shows that our rates are attractive compared to commercial banks. Over and above, we do not charge any fees when the funds are credited or transferred to another local account.
2. LOCAL AND INTERNATIONAL FINANCIAL NEWS
South African Reserve Bank increases Repo rate again ››
The Reserve Bank’s Monetary Policy Committee has voted in favour of another 0.25% interest rate hike on 27 January 2022 and a further one on 24 March 2022. This brings the prime lending rate to 7.75%.
The Reserve Bank had no choice but to raise interest rates, despite the weak economy and the unemployment rate. The alternative would make an already awful situation intolerable, risking the economy potentially running into a stagflation.
On a housing bond of R 2 Mio at the prime interest rate, this means a monthly increase of approximately R 600 p.m. in repayments.
South Africa’s unemployment crisis ››
The recent figures are not very encouraging: Of the 39.5-million South Africans between 15 and 64, the reality is that only 14.9-million have a job.
Officially, SA’s unemployment rate hit a record 34.4% at the beginning of the year. However, this figure excluded over 3 million discouraged jobseekers and another 13.5 million that are not economically active for one reason or another. Only 7 years ago, the unemployment rate was 10% better. The youth unemployment currently stands at 64% for the ones between 15 and 24 years of age.
Urgent intervention to create jobs is required from the presidency, including the Department of Home Affairs, to rectify the problems that former president Zuma created!
Budget Speech highlights ››
Our new finance Minister, Mr Enoch Godongwana delivered a little bit of this, a little bit of that, but no fireworks! Continued fiscal constraint, tiny concessions on personal income tax brackets, fuel levies, corporate tax relief, an easing on forex controls for businesses as well as continued support for structural reform all add up to a marginally market-friendly budget.
This is a brief summary of the most important points:
- Revenue collections for 2021/2022 have been significantly better than initially projected, largely as a result of windfalls of R 181 billion from the mining industry due to higher commodity prices.
- Main budget revenue is projected to be at R1,58 trillion or 24.7% as a share of Gross Domestic Product (“GDP”) in 2022/23.
- Real GDP growth of 2.1 percent is projected for 2022. Over the next three years, GDP growth is expected to average 1.8 percent.
- Government debt has reached R4,3 trillion and is projected to rise to R5,4 trillion over the medium term.
- The consolidated budget deficit is projected to narrow from 5.7 per cent of GDP in 2021/22, to 4.2 per cent of GDP by 2024/25.
- Debt-service costs are continuing to increase. This year, South Africa is budgeting to spend R 301 billion on debt service costs alone. Roughly 19 cents out of every Rand collected will go towards servicing interest.
- Personal income tax brackets and primary, secondary and tertiary rebates will be increased by 4.5%, in line with inflation. The annual tax-free threshold for those under 65 years will increase to R91 250.
- Medical Scheme Fees Tax Credits: The value of the medical tax credit is proposed to increase by inflation from R 332 to R 347 per month for the first two beneficiaries. The monthly credit for the remaining beneficiaries is proposed to go up from R 224 per month to R 234 per month.
- Excise Duties: There will be an increase in excise duties on alcohol and tobacco of between 4.5% and 6.5%. In addition, government proposes a new tax on vaping products of at least R2.90 per millilitre from 1 January 2023.
- Employment Tax Incentive (“ETI”): The ETI will be increased by 50% to R 1500. To address abuse of such incentives, government proposes to impose understatement penalties on reimbursements that are improperly claimed in terms of this incentive.
- There are no changes to capital gains tax, estate duty and transfer duties.
- Disclosure of wealth: Provisional taxpayers with business interests are required to declare their assets (based on their cost) and liabilities in their tax returns each year. To assist with the detection of non‐compliance or fraud through the existence of unexplained wealth, it is proposed that all provisional taxpayers with assets above R 50 million be required to declare specified assets and liabilities at market values in their 2023 tax returns.
The income tax tables for individuals for the tax year 2023 (1 March 2022 to 28 February 2023) are as follows:
|Taxable income (R)||Rates of tax (R)|
|0 – 226 000||18% of taxable income|
|226 001 – 353 100||40 680 + 26% of taxable income above 226 000|
|353 101 – 488 700||73 726 + 31% of taxable income above 353 100|
|488 701 – 641 400||115 762 + 36% of taxable income above 488 700|
|641 401 – 817 600||170 734 + 39% of taxable income above 641 400|
|817 601 – 1 731 600||239 452 + 41% of taxable income above 817 600|
|1 731 601 and above||614 192 + 45% of taxable income above 1 731 600|
|Primary||R 16 424|
|Secondary (65 and older)||R 9 000|
|Tertiary (75 and older)||R 2 997|
|Under 65||R 91 250|
|65 and older||R 141 250|
|75 and older||R 157 900|
4. SWISSSURE: SHORT-TERM INSURANCE NEWS
Old Mutual Insure Emergency App ››
Please click here for the OM Insure Emergency APP, which policyholders can use to log claims and track same (accident, mechanical breakdown, flat tyre / battery, run out of fuel, request assistance, home assistance, claim registration, cross boarder letters, confirmation of cover, policy schedules, etc.).
Important announcements for Renasa policyholders ››
The insurer is amending the excess structure on domestic policies. Please click here to view the new rates.
The point of the purchase of the salvage by the insured in the event of a motor vehicle write-off, can be viewed here.
Western Insurance deletes medical cover ››
Please click here to read the communique to all Western clients. The insurer had to amend their cover to make sure that their policies are compliant with legislation.
Understanding SASRIA cover on commercial policies››
As you are aware, during 2021 we experienced unrest in our country which led to many Sasria claims. It is important to understand that Sasria does not always follow the underlying policy, particularly when it comes to the underlying policy extensions on commercial policies. Sasria for commercial policy extensions must be selected and specified.
In addition, Sasria also provides cover that is not provided for by the underlying policy. Therefore, if Sasria rejects any claim, the underlying policy will not respond to any form of Sasria cover, as the underlying policy specifically excludes any form of cover provided by Sasria.
These are some examples of Sasria extensions on commercial policies which can be selected:
– Escalation and/or inflation
– Claims preparation costs
– Capital additions
– Architect and professional fees
– Clearance costs (debris removal)
– Security costs
Please contact us if you are not certain on some of these aspects, we are available to assist where required.
SASRIA rate increases are being implemented ››
As mentioned in our last newsletter, the government insurance company has incurred huge losses due to the riots experienced during last year. Policyholders will be separately notified about the increases. Santam has already sent out a circular, which you can read here.
War in Ukraine leads insurers to exclude cover ››
As one of the first insurers, Horizon Marine recently announced that they will no longer provide cover for cargo being transported through the Ukranian war zone to and from South Africa. Please click here to read the notice to policyholders.
Important points on car rentals via your insurer ››
You have the choice of various car rental periods on your motor insurance policy, should your car need to go in for repairs after an accident or if it was stolen. The rental periods start from 30 days up to 90 days, depending on the insurance company.
With the Covid backlog in productions, many car spares are not readily available and the import can take several months. Toyota currently have a backlog for new vehicles and parts.
Ukraine manufacture wire harnesses for BMW and VW, and all production plants have shut down – there are warnings on availability for these vehicles. We therefore suggest that you check your rental period and extend the term.
Another important point is the insurance cover on the rental vehicle. Your domestic policy will not cover you for damages to the rental car and you need to conclude the insurance with the car rental company.
Insurers extend driver licence’s grace period ››
Western and Old Mutual Insure have come to the rescue for drivers with expired licences.
OMI has extended the period to 30 September 2022 and Western to the end of October. This means that the insurers will settle claims whilst the driver has an expired driver licence.
We are certain that other insurance companies will follow suit and will keep you updated.
Santam / H&L amends Business Interruption extensions ››
The company is informing all commercial clients of the change to the BI cover, because reinsurers have withdrawn certain covers. Please click here to read the details.
Department finally issues Critical Skills List ››
The new list was published on 2 February 2022. To view the new critical skills, please click here. These are points worthwhile noting:
– The list is shorter but occupations are broader based.
– The new list is more relevant to occupations that are needed in South Africa.
– Occupations are better defined
– Directors and managers’ occupations have been added to the list
– All medical occupations have been removed, but Nurse Educator has been included.
– Unfortunately, Home Affairs released a directive shortly after the new critical skills stipulating that it will no longer issue a 12-month ‘job seeker’ visa. That means you have to have a job offer to apply for a critical skills work visa.
Overall, the list seems to have improved from the old one dated 2014.
New court date for our Class Act ››
Since our last communication, our Advocate was approached by the State Attorney to submit copies of all outstanding PR applications. Such were delivered to the State Attorney a few weeks ago.
In a surprising move, Advocate Simba Chitando was asked to have the court date postponed. In return, the State Attorney will work through each PR application in order to finalize all outstanding applications.
We believe that many applications were lost by the Department and could previously not be worked on. We expect that each applicant will be contacted directly by the Department in the coming weeks/months. In the meantime, we have received a few PR applications that are finalized.
If applications are not finalized by the 24th June, an appropriate costs order against the Minister of Home Affairs will be sought.
We are surprised about another postponement, but are guided by the Advocate who is of the opinion that this agreement is the best way forward to put a deadline to have the applications finalized.
We would appreciate if you could give us feedback when you are contacted by the Department so that we can assist you with the reply.
We will keep you automatically updated on further developments.
Foreign graduates may find it difficult to stay in South Africa ››
Home Affairs Minister Aaron Motsoaledi closed a gap in legislation, which he was not aware of, just a few weeks ago. In the past, foreign-born graduates that finished their studies in South Africa were able to stay on indefinitely. Under the new dispensation, the foreigners need to have a firm job offer or show evidence of work experience.
Motsoaledi’s move to tighten immigration rules follows the controversial decision taken last December, not to renew the special permits given to 200’000 Zimbabweans in 2009. Many of them will lose their right to residency in South Africa by the end of this year.
6. HEALTH INSURANCE
BDAE adjusts premiums for Expat Retired Plan ››
The monthly insurance premium for EXPAT RETIRED Basis international health insurance will increase as of 1 April 2022 under the group insurance contract with BDAE Expat GmbH.
The following table shows the monthly premium applicable from April 2022. These are the contributions of the latest product version of EXPAT RETIRED.
Please note that the above contributions are the basic contributions and do not take into account any payment surcharges. The insurance conditions valid from 1 April 2022 can be found here: https://www.bdae.com/en/adjustment-expat-retired-2022
Update from Cigna Global ››
Due to a new European regulatory requirement, called Strong Customer Authentication (SCA), to reduce fraud and make customer recurring premium payments more secure, the insurer has to review the maintenance of payment details of clients. The new regulation will be effective from 14th March 2022.
We therefore do anticipate some Cigna Global customers to be impacted by the changes, with the possibility that some credit card payments may potentially fail. The insurer is putting some proactive measures in place, to limit impact and disruption to customers and coverage where possible. These can include a zero amount transaction as a precautionary action to authenticate the payment details of those impacted customers, and, if necessary, manual verification follow up directly with the customers and card holders.
Currently there is no action for clients to take, however, over the course of the next few weeks, the insurer will be reaching out directly to impacted clients to advise them of the new regulation.
New options to renew your vehicle licence ››
There are still long queues at the traffic department and some institutions have taken the initiative to help motorists:
Retail group Pick n Pay is trialling a system that will allow motorists to renew their vehicle licences in-store. The retailer said the system will allow customers to skip queues at traffic departments and post offices by setting up a profile and paying in-store at a till point.
The group said renewals can be done for all areas in South Africa and will also allow customers to pay any outstanding fines that could be blocking a disc renewal in the same payment. Customers should receive their vehicle licence disc via courier within 10 business days, delivered to an address of their choice.
How it works:
– Register with your cellphone number at the till in-store or register on Pick n Pay’s website.
– Set up your profile and your payment on the portal and opt to pay in a Pick n Pay store.
– Pay in-store at the till by providing your cellphone number as your payment reference and the group will courier your vehicle licence disc in 10 business days.
– When you are ready to renew your vehicle licence disc, make sure you have uploaded the required documentation and captured the address you would like the disc to be delivered to on the portal.
– You can then set up a payment for your vehicle licence renewal and select to make payment in a Pick n Pay store.
The fees are as follows:
– A licence disc renewal admin fee of R345 (including VAT);
– A delivery fee of R99 (including VAT).
If there are any outstanding fines that are blocking your renewal, you will have the option to select these fines to include in your payment. If you do not settle these fines, your disc cannot be renewed.
The City of Cape Town is also offering an online renewal service by registering on https://eservices.capetown.gov.za/irj/portal.
Conversion of foreign driver licences ››
Our motor claims department encounters regular problems when it comes to foreigners that have obtained permanent residence, but omitted to convert their foreign driver licences. Please click on this link to see what the National Road Traffic Act prescribes.
Ramaphosa relaxes Covid rules – but not state of emergency ››
The president announced the following measures:
– Vaccinated visitors to South Africa no longer need to provide a negative PCR test.
– Events that require proof of immunisation can accommodate people up to 50% capacity.
– Wearing masks outdoor is no longer necessary but is still required in public indoor seatings.
The president is under heavy criticism not having followed the recommendations by scientists, to remove all restrictions. It seems the members of the Corona Command Council want to hang on their powers under the Disaster Management Act – time is rife to allow the economy to fully reopen! A review of the measures will take place on the 15th April 2022.
Please click here to read the latest regulations.