The proposed amendments to the Income Tax Act put forth by the National Treasury mark a significant shift in the taxation landscape for remote workers in South Africa. Under these amendments, Foreign Companies that employ South African individuals for remote work will be required to comply with the PAYE (Pay-As-You-Earn) system, UIF (Unemployment Insurance Fund) contributions, and the Skills Development levy. This move carries notable implications for digital nomads and remote workers.

More admin issues

Digital nomads, who often choose locations for their lifestyle and work flexibility, could face substantial changes in their financial circumstances. The implementation of PAYE means that their taxes would be deducted at source, potentially leading to higher tax deductions. Additionally, complying with UIF and Skills Development levy requirements might add administrative burdens for both the workers and the employing companies.

More tax issues

From an economic perspective, these amendments could yield both positive and negative outcomes. On one hand, the government could see an increase in revenue as previously untaxed income is now subjected to taxation. This could potentially contribute to local funds and government programs. On the other hand, there’s a risk that some digital nomads might decide to leave the country in search of more tax-friendly or administratively convenient alternatives, leading to a potential loss of skilled individuals.

More legal issues

Moreover, there’s the matter of terminating employment for remote workers. The legalities surrounding employment termination can be intricate and differ from country to country. Foreign Companies might face challenges in understanding and adhering to South African labor laws when it comes to remote workers.

Revenue verses skills

In conclusion, the proposed amendments to the Income Tax Act reflect a significant attempt to adapt taxation policies to the evolving landscape of remote work. While they have the potential to increase government revenue, they also pose challenges for digital nomads and remote workers, from higher tax deductions to administrative complexities. The impact on the economy will depend on how effectively these changes are implemented and whether they strike a balance between taxation and retaining a skilled workforce.

Over the years, women have made remarkable advancements in various fields, including education, careers, and entrepreneurship. However, certain financial disparities still persist, such as the gender pay gap and a higher likelihood of interrupted careers due to caregiving responsibilities. These factors can impact women’s long-term financial security, making it crucial for women to have a strong grasp of financial concepts and strategies.

Financial Literacy among Women:

Financial literacy refers to the ability to understand and effectively manage personal finances. Studies suggest that women, on average, tend to have slightly lower financial literacy scores compared to men.

However, it’s important to note that financial literacy is not solely a gender-specific issue. It affects people of all genders and backgrounds.

Some ways to improve Financial Literacy

Education

Providing comprehensive financial education is key. Schools, community centres, and workplaces can offer workshops and courses that cover basic financial concepts, such as budgeting, saving, investing, and retirement planning.

Online Resources

The internet offers a wealth of free resources. Women can access online courses, articles, videos, and podcasts to learn about personal finance at their own pace.

Role Models and Mentors

Women can seek out successful female role models in finance and business who can share their experiences and insights. Mentoring relationships can provide valuable guidance and encouragement.

Open Conversations

Encouraging open discussions about money within families and social circles helps break down taboos surrounding finances. When people share their experiences, challenges, and lessons learned, it fosters a supportive environment for learning.

Professional Financial Advice

Consulting with financial advisors can provide personalised guidance tailored to individual circumstances. Financial advisors can help women set goals, create financial plans, and navigate complex financial decisions.

Networking Groups

Joining women’s networking groups related to finance and entrepreneurship can provide a supportive community where women can share knowledge, experiences, and opportunities.

Start Early

It’s essential to start learning about financial planning early in life. Schools and parents can play a significant role in instilling healthy financial habits from a young age.

Regular Assessment and Adjustment

Financial situations change over time. Regularly assessing financial goals and adjusting plans as needed ensures that women stay on track to meet their objectives.

National Women’s Month serves as a reminder of the progress made and the challenges still faced by women in various aspects of life. Empowering women with financial literacy is a critical step toward gender equality and overall well-being. By advocating for comprehensive financial education, fostering open conversations, and providing access to resources and support, we can collectively work towards improving the financial literacy of women and ensuring they are equipped to make informed and confident financial decisions.

Research

Here are some research-based facts regarding financial literacy for women:

Gender Gap in Financial Literacy: Studies have consistently shown a gender gap in financial literacy. According to a global survey by the OECD, women tend to score lower on financial literacy assessments compared to men. This gap is observed across different age groups and countries.

Impact of Education: Research indicates that higher levels of education are positively correlated with improved financial literacy. However, despite women’s increasing educational attainment, the gender gap in financial literacy persists.

Retirement Readiness: A study by the Employee Benefit Research Institute (EBRI) found that women are generally less confident about their retirement savings than men. Only 22% of women surveyed were very confident about having enough money for a comfortable retirement, compared to 36% of men.

Investment Knowledge: Women often display lower levels of confidence and knowledge about investing. A report by Sallie Mae found that women are less likely to invest and tend to hold more of their savings in cash compared to men.

Longevity and Financial Planning: Women tend to live longer than men, and they also have a higher likelihood of being single in their later years due to factors such as widowhood or divorce. This makes financial planning for retirement and long-term care especially important for women.

Pay Gap’s Impact: The gender pay gap can have long-term consequences on women’s financial security. Lower earnings can lead to reduced retirement savings and Social Security benefits, ultimately affecting women’s overall financial well-being in retirement.

Caregiving and Career Interruptions: Women are more likely to take on caregiving responsibilities, which can lead to career interruptions. These interruptions can impact their earning potential, Social Security benefits, and retirement savings.

Lack of Confidence: A study by Financial Finesse found that women often express lower levels of confidence in their financial decision-making abilities compared to men. This lack of confidence can lead to avoidance of financial matters or reluctance to engage in investment activities.

Interest in Financial Education: Despite the challenges, women are interested in improving their financial knowledge. A report by TIAA-CREF Institute found that women express a strong desire for financial education and seek guidance on topics like investing, retirement planning, and debt management.

Financial Advice: Research suggests that women are more likely to seek financial advice and consult professionals when making financial decisions. This indicates a proactive approach to improving financial literacy and making informed choices.

These research findings highlight the importance of addressing the gender gap in financial literacy. By providing targeted financial education, promoting confidence in financial decision-making, and addressing specific challenges faced by women, we can work towards closing the gap and ensuring that women are well-equipped to manage their finances effectively.

A recession is a period of economic decline where businesses don’t do as well, leading to fewer jobs, and people struggling to make ends meet. It’s characterized by a decrease in the total goods and services produced (GDP), increased unemployment rates, and overall financial hardship for individuals and businesses alike. The high rate of inflation globally and locally is threatening us with a recesion.

Here are three problems that may affect personal finance if an economy is in a recession:

Job Loss or Less Money Coming In

During a recession, some companies may need to save money, so they might lay off workers or give them less pay. This means people can lose their jobs or earn less money, making it harder to pay bills, save for the future, or invest in things.

Trouble with Borrowing Money

In a recession, it can be tough to borrow money from banks or lenders. Some people might rely on credit cards or loans to get by, but if they can’t pay them back, their credit score can get damaged. This makes it even harder to borrow money in the future. Having too much debt can also make it tough to save money or invest.

Asset Values Going Down

During a recession, the things we own, like stocks, bonds, and real estate, might lose their value. This can make people’s overall wealth go down. It’s especially hard for those who were counting on these assets for their retirement savings or long-term financial goals. If they have to sell these things, they might have to do it at a loss, which means they won’t get as much money as they hoped.

Gold is often considered a better investment in times of high inflation due to several key reasons:

Inflation Hedge

Gold has historically acted as a reliable hedge against inflation and the Rand. When the general price level of goods and services rises, the value of fiat currencies decreases, leading to a loss in purchasing power. Unlike paper currencies, gold’s intrinsic value is not directly linked to any government or central bank, making it less susceptible to depreciation during inflationary periods. As a tangible asset, gold tends to maintain its value or even appreciate in real terms, offering investors a way to preserve their wealth.

Safe Haven Status

During economic uncertainty and rising inflation, investors often seek safe-haven assets to protect their portfolios from market volatility. Gold is widely regarded as a safe-haven asset due to its long-standing history of being a store of value. Inflation erodes the value of other investments, such as stocks and bonds, making gold an attractive alternative as it exhibits less price volatility during turbulent economic conditions.

Limited Supply

Gold’s scarcity contributes to its allure as an inflation hedge. The supply of gold is relatively finite, and its extraction is costly and time-consuming. Unlike fiat currencies that can be printed in unlimited quantities by central banks, gold cannot be manufactured at will. This scarcity factor helps maintain its value and drastically prevents excessive inflation from impacting gold prices.

Where to invest

You can invest directly in gold mining shares. You can buy and hold gold coins such as Kruger Rands through an exchange. You can also invest directly in an exchange-traded fund which tracks the performance of gold at a very low cost.