Cash tips

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Read Paddy Hartdegen’s thoughts on this matter.

During the course of the past few days I came across a very interesting little snippet from the South African Revenue Service – notoriously tough on implementing the tax laws – that a concession has been given to young taxpayers who work as waitresses or waiters.

As most people might know the threshold for paying tax is just over R67 000 a year so if you earn less than that you need not worry about tax.  However, if you earn R67 112 then you are liable for tax and must cough up and do your return too.

Now it seems unlikely that a waiter or waitress will make that much money looking after tables in the evening while they complete the PhD that might make them employable.  But it is possible given the fact that some patrons in restaurants show-off by leaving huge tips when they have a large party of guests to impress.

Anyway, Pravin Gordhan, the Minister of Finance, made a concession for waiters and waitresses:  any tips that are paid in cash can be pocketed and will not attract any tax.  A modified “what you see is what you get to keep”.

So basically whatever they cash they get is theirs.  Mahala.  And by keeping it they’re not breaking any laws either because the law says they don’t have to declare their cash tips.

Obviously, ‘tips’ that are paid in cash are not taxable.  Immediately I’m going to classify myself as a ‘freelance waiter (not ‘writer’) and start claiming that I have to take an ‘order’ to write something and deliver it on time and ‘grilled to perfection’.  Then, as a “freelance writer’, I don’t have to pay tax as long as I get paid in cash.

Anyone who is a ‘waiter’ and gets paid in cash is eligible to claim.

So I wonder how long it will take for some clever engineers to use this definition:  Consultant engineers become ‘consulting waiters’ offering to bring Medupi (at last) into the power grid for a ‘cash tip’ of R175-million.

In fact, new contracting waiters will be popping up all over the place to bring projects on line and to order – baked as they should be with a dash of soured labour relationships and some contract labour on the side.  Who could argue?

Africa is an ingenious place, so the street sales vendors might start carrying cash-card machines just to do the business because if they can make a sale on the side of the road with a portable point-of-sale machine they won’t mind paying the tax because who’s ever going to trace them anyway.  The dynamics of selling can change so dramatically it’s almost laughable.

And I love it because the clever ‘spin-sters’ in our society will put a whole new ‘spin’ on what’s cash and what’s a genuine, taxable transaction.

It’s such a new ‘spin’ on the ‘profession’ of waiting on tables and I don’t think it will be long before we start seeing ‘housing waiters’; ‘project facilitator waiters’ or ‘human resources waitresses’ – all claiming that their ‘payment’ was actually nothing more than a ‘tip’ for taking care of a particular client with the kind of diligence and attention to detail that all really good ‘waiters’ display.

We might even have to redefine previous role:  Julius Malema could become a ‘youth league waiter’ getting rid of his awkward tax problems and maybe even President Jacob Zuma could be the ‘head waiter’ of ‘service delivery by the ANC’.

Malema has not been convicted of any corruption and neither has Zuma so if there was an enquiry, they might say that they were not liable for tax in the first place because, after all, they were just waiters, getting paid in cash for deliver ‘a decent service’.

Interestingly, the Receiver has not given any indication of the maximum amount of tips that can go undeclared.

So if I might decide to open a shebeen myself. My menu would state that all food and drink is free as long as you pay me an equivalent tip in cash.  I could then keep that cash as a ‘tip’ for serving free food Tax problem solved. Not VAT, not services levies or training levies.  Just ‘tips’.

Of course it does mean that anyone using a credit card would either have to pay penalties in the form of traceable fees for eating my food – as calculated separately and excessively. Otherwise, they’d pay my tip in cash, give me the loot and everyone’s happy.

My bank charges would all but vanish, but the vault in my house might be a huge target for the criminals seeking ‘tips’ for ‘breaking and entering’ claiming they were just taking possession of the ‘wealth’ tips that they were entitled too.

Of course anyone with half a brain knows this is so far outside the principle of the Pravin Gordhan’s concessions that could never hold up in a court of law but it might open the door to a litany of chance-takers who surface whenever any concession – complex or rudimentary – is made the South African Revenue Service.

And with the high taxes that we are paying, who can blame because taxes are number on the list of ‘resentment purchases’ alongside – it would seem – with electricity payments in informal settlements.

I love the fact that youngsters are not being taxed on their cash tips but I’m just waiting to hear when, where and how the first ‘chancers’ are going show their faces declaring that a payment was a ‘tip’ not a salary, a commission or a bribe.

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Crown Publications, one of South Africa’s largest business-to-business publishing houses, came into existence in 1986. Since then, the company has grown from producing a single magazine, Electricity SA (renamed Electricity+Control), to publishing six monthly magazines, three quarterlies, and a number of engineering handbooks.