Entries tagged with “VAT”.


imageThe Sweet Service Award goes to ABSA Sea Point, and its Relationship Manager Yusriah Khan, for faxing me my February business bank statement, as I had not received it in the post yet, and needed it to complete my VAT return for the accountants before the Easter long weekend. No questions were asked other than the bank account number, in stark contrast to the performance I had to go through with the Santyger branch.

 

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WhaleTalesTourism, Food, and Wine news headlines

*   Taittinger has redesigned its bottle label and gift pack, to reflect its status as official champagne sponsor of the 2014 World Cup soccer in Brazil.   Holograms have been used, and the footballs on the label appear raised but are flat.  The brand has already been fined in France for advertising its link to the World Cup, but will communicate this in other countries, especially in South America, having the right to the title until the end of 2015.

*   The directive by the Minister of Finance that VAT be levied on international e-books levels the playing field says the Publishers’ Association of South Africa (PASA), despite VAT being charged on books not being encouraged by the PASA.  The new legislation is not a surprise as governments are working on collecting VAT/sales tax on sales in their regions. Foreign retailers selling into South Africa will now have to register as VAT vendors. A healthier retail book trade is expect to result. Internationally digital book sales are at about 50%, but in South Africa they are currently only at 20%.  Charging VAT could generate R 1 billion in revenue for the country. The Cape Town Book Fair, running from 13 – 15 June, will showcase the latest technological developments on e-reading. (received via media release from The Embassy)

*   Bushman’s Kloof Wilderness Reserve is hosting a  number of Food and Wine Weekend treats in winter, pairing with top wine estates, including Meerlust (30 May – 1 June), Bouchard Finlayson (27 – (more…)

Wine Tourism South Africa HandbookMonika Elias of World Focus Media has done a great job over the past ten years in documenting the contribution of the wine routes, and the wine estates on them, to Wine Tourism South Africa, in helping to inform and educate locals as well as tourists about wine in general, and to boost wine sales.  Her 2014 edition of ‘Wine Tourism South Africa’ handbook has just been published , bearing the slogan of ‘sip, stay and play‘!

In her ‘Publisher’s Letter‘, Monika defines Wine Tourism as ‘…in the glass, on the plate, in the bed, around the vines, and for the planet’.  She writes about ‘winery atmospherics’, such as architecture, lighting, sound, temperature, and kinetics, playing an important role in creating a point of difference for wine estates in an increasingly competitive world.  Wine is becoming an increasingly important part of the Tourism experience, and most visitors to Cape Town and the Western Cape will be very likely to visit a wine farm to taste their wines, to eat at a Winelands restaurant, or visit an event linked to wines.

The Handbook evaluates top restaurants on wine estates, using chefs hats (three maximum) to denote how good or not they are;  and evaluates the winelists of the restaurants on the wine estates, by means of wine glasses (three maximum).  A price range indication is also provided for the Winelands restaurants.  The Handbook starts with tourist information and advice about car rental, taxis, trains, parking attendants, banking hours, VAT, the weather, tipping, and more.  It lists the winners of the fifteen categories in the 2013 KLINK Wine Tourism Awards, which received votes from 15000 consumers last year. (more…)

WhaleTalesTourism, Food, and Wine news headlines

*  South African consumer confidence is at its lowest level in ten years, records the Bureau of Economic Research, and expects it to become worse next year!

*   To celebrate World Tourism Day (27 September), Western Cape Tourism Minister braaied at Oudekraal, cycled through Chapman’s Peak, and stopped at pavement cafés en route on Heritage Day. (via media release from Minister Winde’s office)

*  More than 15000 UK restaurants and pubs are participating in a Tax Parity Day, protesting the 20% VAT on hotel, restaurant, pub, and catering costs.  The aim is to prove that sales will increase if the VAT is reduced.

*   A four course Winemakers’ Dinner will be held at the Franschhoek Kitchen at Holden Manz on 26 September, with wines from Arra, Maison, Noble (more…)

A surprise addition to the V&A Waterfront is Vovo Telo, a small, boutique and petite artisanal bakery and restaurant franchise which opened its first branch in Cape Town at the beginning of this week.  It is homely and welcoming, very un-V&A Waterfront and very un-franchise, and sells a range of excellent artisanal breads, as well as pastries.  The essence of the brand is ‘love, bread, coffee’.

There are five branches in Johannesburg (the one in Parkhurst being the flagship), two in Pretoria, and two in Port Elizabeth.  Mark Burger is the franchisee of the V&A branch, and is already eyeing other locations in Cape Town, Constantia being a potential.  Mark has been in the food franchising business for the past thirty years, having started Skippers Fish & Chips and creating franchise branches, owning Debonairs, Bravo, and Fontana before selling these.  He joined Famous Brands, the company which owns the Steers, Vivo Telo, Debonairs Pizza, Wimpy, Mugg & Bean, House of Coffees, and Tashas chains, and was their New Business Director when it was still called Steers Holdings. He has opened 300 – 400 franchises in the past 20 years, and is likely to be a tough-negotiating V&A Waterfront tenant.  He says that they have become far more flexible already. When he signed the contract, he was not told that the V&A Food Court would be closed until November, inclusive of the seating area outside it, curtailing the traffic to his store.

To keep the business in his ‘bloodline’, he has teamed up with his nephew Jade and his wife Adele. Mark lives in Johannesburg, having a son at school there, but plans to move to Cape Town eventually. The store can seat 75 customers inside the 210 m² and outside, and has a classy yet friendly interior, with chandelier, and Persian carpets. A fun mural above the bread shelves reflects Cape Town, with Table Mountain, at which ‘table’ Queen Victoria is depicted, with a ‘I want my coffee’ tattoo on her arm. The decor is standard across all the Vovo Telo branches, done by Mary from Famous Brands.  The name ‘Vovo Telo’ means ‘grandfather’s place’ in Portuguese, and comes from a holiday the three original owners spent in Madagascar, where they stayed at a Vovo Telo hotel, and saw a local with a baguette on his bicycle, igniting an interest to start a bakery named Vovo Telo in Port Elizabeth.  The three original owners are still very hands-on in and passionate about their business.  During the day one can sit outside in good weather, and the Marimba band performing nearby adds a good vibe.  Tables are a mix of aluminium and wood, and chairs are white moulded plastic.  Vovo Telo branded brown and white sugar sachets, and coarse sea salt and black pepper grinders are on the tables.  The menu design mirrors the fun feel of the website.  Paper serviettes are offered.

Because Vovo Telo is primarily a bakery, customers do not necessarily think that it will be open for breakfast, lunch, and dinner, as well as coffee and tea all day, with a selection of good pastries.  I had heard on my first visit that a Master Patissier starts with the group next week, and he will be travelling between the different franchises, to do staff training on pastries, still an area with improvement potential, Mark said honestly.  Part of the interior is the restaurant seating on the mezzanine level, and a few tables downstairs alongside the pastry counter and the massive bread oven.  A small table has pieces of bread which one can sample with Olitalia olive oil and balsamic vinegar. The bread is special in that Eureka stone-ground flour is used, to which is added a special culture which is passed on from store to store.  The bread dough leavens for 14 – 16 hours, to ‘ferment and rise’, I was told, and no preservatives are added.  Dough is hand-rolled, making the baking artisanal.  The baking staff were sent to a Johannesburg branch for training. Everything in the store is made from scratch, even the pasta, which Mark told me is already receiving rave reviews.  Bread styles which are made are Ciabatta (R16), 70% Rye and 30% Italian flour (R22), Sourdough (R20), Cheese Sticks (R15), Olive breadsticks (R18), Panini (R6), Baguette (R11), and Olive Sourdough (R30).  Ready-made sandwiches cost around R29, including salami, Reuben, ham, and Pastrami.

The pastry section displays whole cakes (e.g. orange almond, carrot, chocolate, pecan nut, cheesecake) available by the slice (R18 – R25), as well as pastries such as croissants (R10), berry pin wheel (R18), Pain aux Raisin (R15), Pain au Chocolate (R14), Cheese straws (R18), muffins (R18), apple tart, a delicious strawberry and fresh cream tart, and pear tart at R18.  Coffee is by Ciro, and it is preferred that the cappuccino be served as a flat white (R16), but I was served a perfect dry cappuccino when I asked for it.

The menu is printed in green on cream paper, and states that any changes requested to menu items could lead to an additional 20 minute waiting time.  It also states that all prices include VAT, something one does not see on other restaurant menus.  All food is served on a sheet of branded paper on top of a branded wooden board.  Breakfast is served until 11h30, and free-range eggs are used.  Eggs can be ordered scrambled or poached (R22), with their breads, as well as a number of variations to which are added ham, cheeses, sauces, or boerewors.  Croque Madame (wilted spinach, Gruyere cheese, poached egg, and sourdough bread) costs R52. Toast/croissant and jam and cheese or Nutella costs R 26/25.  For the rest of the day, one can order gourmet sandwiches (R29 – R 39). Pissaladiere, being thin crust pizza bases made from ciabatta dough, range from R59 for Marinated tomatoes, and an olive and bocconcini mozzarella pizza, to R72 (ham and Brie, four cheeses, and Avocado, Gorgonzola, and Salami).  I enjoyed their Classic pizza last night, with crispy Gypsy ham, feta, and avocado after (R69). ‘Handcrafted’ Tagliatella is made daily, and is served with fresh tomatoes (R48), steak (R69), zucchini and pine nuts, smoked salmon (R69), and basil pesto and pine nuts. Salads offered are green, honey mustard chicken, roast vegetables, and a harvest board, peaking at R59. No main course costs more than R82 (fillet steak), and one can also order a lamb burger (R67), salmon trout, and an antipasta platter.

To commemorate the Diamond Jubilee of Queen Elizabeth’s reign this weekend, Vovo Telo is offering an amazing value R14 offer of warm scones with mascarpone cheese, strawberry jam, and Boerenkaas for all of next week, making one ‘good to go for another 60 years!’, says its flyer.  The application for the liquor licence has already been lodged, and is awaited.  A small range of alcoholic beverages will be sold, including &Union beers, five or so boutique wines, and some whiskies.

For being in the V&A Waterfront, the prices of Vovo Telo are exceptionally good. The quality of the breads and the good coffee are a further reason to make a stop at this outlet.  The staff is friendly, and the management is present all the time. The arrival of their credit card machine is eagerly awaited.

Vovo Telo, next to Vaughn Johnson, V&A Waterfront, Cape Town. Tel (021) 418-3750. www.vovotelo.com (Not much information on the website, Cape Town not yet listed). Twitter: @VovoTelo  Monday – Sunday, 7h30 – 21h00.

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage

Last week, taxing tips of waiters and other employees, who receive gratuities from customers for good service, was a hot topic on Twitter and other social media platforms, following the publishing of a clarification of the payment of tax on tips by SARS.  Legal views confirm that employers cannot deduct PAYE, the Skills Development Levy (SDL), and UIF from employee income generated from tips, but it also means that the tip income of employees cannot be used as a basis for pension and medical aid benefits.

Business Report wrote that “Waitrons can keep their hard earned tips for themselves and don’t have to worry about the tax man…  According to the last week’s ruling, the transfer of tips handed over to an employer by an employee for ‘safekeeping’ did not constitute a payment of remuneration”.  This view is based on the Group Tips Policy, by which staff pass on their tips to their employers for safe-keeping whilst they are working.  Legal firm Cliffe Dekker Hofmeyr is quoted as saying that the Group Tips Policy sees tips “…as gratuitous payments to which the employees have no entitlement or an expectation of receipt as part of the performance of their duties”, and therefore should not be taxed.

Far more complex is an article by lawyer Stephan Spamer at ENS and candidate attorney Jonathan Sacks, writing on Moneyweb.co.za.    They write that the increased usage of credit cards by customers for safety reasons has led to a large percentage of tips being added to credit card payments, going to the employer instead of the employee.  The employer then has to transfer the tips to the employees.  According to the Fourth Schedule to the Income Tax Act, 58 of 1962, ‘gross income’ includes ‘any amount received or accrued in respect of services rendered or to be rendered, including a voluntary award, as well as any amount received or accrued in respect of or by virtue of any employment’.  The lawyers argue that a ‘causal relationship’between payment received and the service provided must exist for that income to be defined as ‘gross income’.  On the basis of this relationship, the writers argue that the tip payment is part of gross income, and is therefore taxable, especially if the expectation at the time of appointment of the employee was to receive tips.  The article becomes confusing when the writers argue that the definition of ‘remuneration’, including ‘all payments and amounts payable, in cash or otherwise, whether or not for services rendered and includes salary and wages, leave pay, bonuses, gratuities, commissions, over time pay and other amounts paid for services rendered as well as allowances and advances’, is similar to that of ‘gross income, but that it does not mean that the employer must deduct the valid taxes and deductions.  They argue that it is not the employer paying the tip – in essence it is the customer paying it via the employer, who just holds the tip on the employees’ behalf, and therefore as this cannot be viewed as remuneration, no taxes and fees have to be deducted from the monies paid to employees.  Employees can, however, request in writing that the employer deduct PAYE to reduced their tax liability.  Given their conclusion that no tax is payable on tips by employees, the writers argue that no SDL and UIF is deductible either. 

Given the complexity and legality of this SARS Tip Tax ruling, we quote an extract of an article on Moneyweb, written by Cliffe Dekker Hofmeyr Employment Law Director Gillian Lumb and associate Pranisha Maharaj: :“The Binding Class Ruling: BCR 027 recently issued by Sars, declared that the transfer of tips (that were handed over to the employer by the employees for safekeeping in terms of the employer’s proposed Group Tips Policy) from the employer’s bank accounts into the employees’ bank accounts does not constitute a payment of remuneration by the employer as contemplated in paragraph 2(1) of the Fourth Schedule of the Income Tax Act. Essentially, this paragraph of the Act provides that an employer who pays or becomes liable to pay any remuneration to any employee must deduct or withhold employee’s tax from such payment. Binding Class Rulings are intended to promote clarity on the interpretation and application of the tax laws to a class of persons who apply for a ruling in respect of a proposed transaction to which it is a party. Accordingly, tips will not form part of the calculation of any benefit calculations for the employees’ remuneration packages, for example pension or medical aid.  The ruling is in line with the Sectoral Determination 14: Hospitality Sector, South Africa  which defines “remuneration” as ‘any payment in money or in kind, or both in money and in kind excluding any gratuity or gift received from a customer for service rendered”.

The new Tip Tax directive by SARS has been back-dated to August 2010, and covers the five year period from that date.  This raises the following questions:

*   Can employees that had PAYE, SDL and UIF deducted between August 2010 and July 2011 receive their tax and other deductions back, from the employer and/or SARS?

*   Can employers deduct the tip income that went through their credit card machines, and was therefore deposited into the business bank account, from their taxable income for the calculation of VAT and income tax?

Interestingly, yet not surprising, the hotel association FEDHASA has not officially published a guideline about this Tip Tax amendment for their hotel and restaurant members!   On Twitter, the FEDHASA Cape Director for the Restaurant sector, Rey Franco, wrote that tips received via credit card are taxable, and that only cash tips received by waiters directly are not taxable.  We believe that, in the light of the above, he is incorrect.

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com Twitter: @WhaleCottage

The Sweet Service Award  goes to the Western Cape provincial Minister of Tourism Alan Winde, for his responsiveness and willingness to be contacted.  On Twitter two days ago a tour operator requested the name of our provincial tourism minister.  I Tweeted his name and Twitter handle.  Minister Winde immediately wrote back, asking how he could be of assistance, and provided his e-mail address and cellphone number!  There are not many politicians that are so ‘customer friendly’. Minister Winde and our Western Cape Premier Helen Zille have both embraced Twitter.

The Sour Service Award  goes to SARS in Paarl, which is so understaffed that a queue of 50 had to stand and sit for 90 minutes outside on the pavement to get a number to wait inside the building to speak to one of only three staff on duty two weeks ago!   When I got to see one of the staff, I had two bank account changes and two VAT payments to make. Initially the lady told me that she may only handle three queries, and that I would have to go back to get another number for the fourth query, even if I had waited for 90 minutes to get to speak to her!  When I asked to see her manager, she agreed to deal with the fourth query.  Whilst two hours is an unproductive waste of time for working persons, it would have probably taken four hours at the Cape Town city centre branch.  SARS does not allow one’s accountants to do bank account changes anymore (one has to come in personally), and does not allow VAT to be paid via the printed form anymore, sent to companies for years, causing the queues. 

The WhaleTales Sweet & Sour Service Awards are presented every Friday on the WhaleTales blog.  Nominations for the Sweet and Sour Service Awards can be sent to Chris von Ulmenstein at info@whalecottage.com.   Past winners of the Sweet and Sour Service Awards can be read on the Friday posts of this blog, and in the WhaleTales newsletters on the www.whalecottage.com website.

I missed the Cape Town Tourism member presentation by Mary Tebje, Cape Town Tourism’s Trade and Press representative in London, in Cape Town in April, and was alerted to it by Commenters to our blogpost about Cape Town Tourism’s depressing forecast for the tourism industry for the next three years.

The reality is that the UK market, the largest source market for Cape Town, is severely depressed, and this is already making itself felt in extremely poor forward bookings from that country.  The high unemployment, increased air passenger duty, fuel price increases, a VAT increase, and an unheard of inflation rate at 4,5 % have created ‘a pessimism not seen since the 1940’s’, Ms Tebje said.  This has led to the ‘staycation’, with the British being forced to holiday at home. 

The Cape Town Tourism summary of Ms Tebje’s talk is thin, but the bottom-line is that Ms Tebje recommended that tourist packages should be put together for the UK market, and should certainly include cultural experiences.  Guests would want to book a number of activities in all-inclusive packages, so that they did not have to worry about extras to pay for whilst on holiday.  This requires a collaborative approach between accommodation providers and tour guides.  In a discussion at the meeting, the ‘township tour and gum-boot dancing routine’ were felt to not be a worthy representation of Cape Town’s culture. 

Miss Tebje profiled the typical UK traveller as being the ‘over 50s market’, a booming one, which has money, and is largely interested in cultural experiences.  Day trips are popular, and should include food and wine. “Teach them to braai”, she recommended, as the UK visitors love to bring home their newly acquired culinary skills, and to talk about their cuisine experiences.  In 2010, 450000 tourists visited Cape Town from the UK, and a quarter of these came to visit friends and family. Yet Ms Tebje painted a contradictory picture of the UK visitor, saying that they spend three hours per day in the sun, and an hour and a half in the bar, according to a survey undertaken by TripAdvisor!  “In fact, we are so busy boozing and bathing that Brits often neglect cultural pursuits, rating the worst in Europe for museum visits and other cultural activities”, she said.  Ms Tebje said that the UK tourists are looking for more adventure from their holidays these days, and therefore they are now travelling to Borneo and Bolivia.

Ms Tebje said that Cape Town was competing with destinations such as Orlando and Spain too, and that the Cape Town accommodation prices were not inexpensive.  Added to this was the feedback that Ms Tebje had received from tour operators selling the Cape in the UK, feeding back to her the negative effect of the strong Rand, the high cost of flights to our country, shorter booking lead times, poor perception of value for money, and price sensitivity.

The Cape tourism industry will have to look for tourists from Germany and particularly South Africa, to survive the poor coming summer season.  It won’t include too many visitors from the UK!

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com  Twitter: @WhaleCottage

I am always astounded about how our local tourism authorities make comments to the media without foundation. 

Cape Town Tourism’s latest statement refers to a nonsensical “better than average” tourist season which the Cape has just experienced over the festive season, according to the tourism body.  The CEO Of Cape Town Tourism, Mariette du Toit-Helmbold, has been at her holiday home in Pringle Bay over the festive season, according to her Tweets on Twitter, and no formal survey has been conducted amongst its accommodation, restaurant and product owner members to come to such a conclusion. 

In a report in the Cape Times, the festive season was described by Mrs Helmbold as “We have had a better than average holiday season with many accommodation establishments recording ‘higher than expected’ occupancy rates”.   It is unclear exactly how good or bad this is meant to be,  the newspaper interpreting her comments in its headline as “Cape Town had good ‘first summer season’, an exaggeration.   She described the Cape’s summer season as consisting of two parts:

*   “a domestic high point during December (and the school holidays)” – Mrs Helmbold has no clue of the reality of the tourism pattern in this quote, in that the festive season period is made up of a mix of international (German and UK in the main) and domestic visitors, who only arrive in the Cape in any large numbers from 26 December onwards, and who largely left the Cape to return home this past weekend, making it a very short festive season of two weeks.   South African visitors to the Cape were more likely to be staying with friends and family than in accommodation establishments.

*   “an international season that peaks between mid-January and the end of February” – once again, Mrs Helmbold is out of touch, in that a tourism vacuum started yesterday, and lasts for two weeks before things pick up again, and then the season will run through until Easter.    February looks well-booked ahead already, mainly by British visitors, and those attending weddings.

The Times  crows today “Hospitality industry coins it”, overexaggerating as it likes to do, but refers extensively to Durban.  The article also quotes one-month holidaying CEO of Cape Town Routes Unlimited, Calvyn Gilfellan, in stating that tourism to Cape Town increased by 3 % over an unspecified period, and that occupancy increased to 65%.  No research source for Gilfellan’s statistics is mentioned.  Gilfellan expresses his satisfaction with the occupancy rate he quotes, but the industry would not be, given that this is the prime period in which it makes its money to survive the bleak winter months.

The exceptionally strong Rand, and the increase to 20 % in the VAT rate in the UK, have been prime deterrents to the UK tourists visiting the Cape, and are the region’s largest source of international tourism.   Its decline has been extremely noticeable this summer season.   However, the extremely severe winter weather experienced in the UK and in Europe has encouraged many tourists to come to the Cape in search of warmth and sun, which they would have had to the extreme last week, when Cape temperatures rose up to 42°C in Franschhoek, for example, Cape Town not being much cooler.   The extreme heat has caused the Franschhoek water supply to be severely depleted, and citizens of the village and its visitors have been encouraged to reduce their water usage by 50 %, ironic in that the village has the largest dam in the Western Cape on its outskirts.

A blow at the start of the festive season was the snow-stuck UK visitors, who could not fly out for three or four days, costing hospitality establishments lost bookings.   Seaside towns such as Plettenberg Bay and Hermanus experienced far lower visitor numbers than in previous years, Johannesburg visitors noticeably absent in the Garden Route town for the second year running.  Last year the Johannesburgers were staying home to save money to renovate their homes for the World Cup, a dream which came true for a small minority only.  Inland towns such as Franschhoek had lots of day visitors, but reduced numbers of guests staying over in accommodation.

It has been a different type of visitor coming to the Cape this festive season, and the domestic visitors in particular appeared to be more demanding, and in some instances dishonourable in cancelling bookings in the last minute, after the rooms have been held for them for many months, without adhering to the cancellation policy, more so than in previous years.   In part this was due to the endless days of a gale-force southeaster blowing over 100 km/hr in Camps Bay, for example, followed by two days of rain over New Year, which led to some guests departing early.  

POSTSCRIPT 20/1: Following our feedback to Cape Town Tourism in this blogpost, Mrs Helmbold has adjusted her definition of the second summer peak to “our international peak tourism season is from end-January until the end of March ” (Ms Helmbold had it as running from mid-January – end February in her December media release), in the newsletter which was sent to members today.  We are delighted that we could be of service to Cape Town Tourism, whose CEO seems severely out of touch with the reality of tourism in the city she is meant to handle the marketing of!

Chris von Ulmenstein, Whale Cottage Portfolio: www.whalecottage.com  Twitter: @WhaleCottage