5 News
News How the national budget affects the industry South African spa and salon owners, as well as the distributors of products and services to this industry, must have breathed a sigh of relief when Minister of Finance, Tito Mboweni, announced on 26 February that VAT would remain the same, meaning that no extra VAT has to be added to treatment and product prices. In addition, the Minister announced that there would be income tax relief of around R2 billion. Mboweni has committed to curtailing Government’s own spending – such as its astronomical wage bill that reportedly accounts for almost a third of its overall spend – rather than increasing personal income tax. Government’s depressing debt problem aside, Mboweni’s budget
speech was, for the most part, well received. On the downside, we can expect fuel hikes this year, which automatically means delivery costs for beauty products will increase, plus consumers may tighten their belts, resulting in less
available spend for beauty and spa treatments. The fuel levy has been increased by 16c, and the levy for the Road Accident Fund (RAF) rose by 9c. The few corporate businesses in the beauty and spa industry must be encouraged by Government’s plan to lower the corporate tax rate, which has remained unchanged at 28% for more than a decade. According to Business Insider, the Government expects that the economy will only grow by 0.9% this year – and that’s with the assumption that exports will grow by 2.3%. Meanwhile, since December 2019, world trade has gone haywire due to the panic surrounding the rampant spread of the coronavirus around the globe.
Government places tourism high on its agenda As this issue of Professional Beauty went to print, the spread of the coronavirus was still adversely affecting the global tourism market. However, at the beginning of March, South Africa’s Tourism Deputy Minister, Fish Mahlalela, confirmed that government had placed a strong emphasis on tourism for sustainable growth and job creation. This is welcome news for South African spas and wellness centres, many of which are situated within destinations, resorts, game reserves and hotels that enjoy the patronage of tourists. Said Mahlalela: ‘The South African government has signed a Memorandum of Understanding/ Agreements with 27 countries across the globe, and continues to negotiate others with the aim to strengthen bilateral relations in the field of tourism.” Mahlalela was speaking at the official opening of the recent threeday Tourism Best Practice workshop
currently underway in Kempton Park, near Johannesburg, attended by international delegates, Mahlalela said the potential of economic growth and development related to the tourism sector are fully recognised, at both the continental and international levels. He continued: “In the African context, the tourism sector is confronted with a number of issues, not only in its long-term development and prosperity, but also in the strategic orientation including dealing with issues such as safety and security, as well as health challenges. “It is important to develop a tourism action plan with the view to optimise the role of tourism as an engine and catalyst for economic
development and growth in Africa, through the establishment of conducive environment, regional cooperation advocacy and stakeholder participation.” In South Africa, the Tourism Grading Council (TGCSA) is the only officially recognised and globally credible quality assurance body for tourism products, in terms of the Tourism Act 3 of 2014. The TGCSA recently announced new and revised grading standards for South Africa, including the introduction of three new categories in the form of apartment hotels and small hotels, in which the luxury form (boutique hotels) are incorporated. online @ probeauty.co.za
