Former Generations star and businesswoman, Sophie Ndaba, finds herself in a challenging situation as her company grapples with a substantial tax debt of over R23 million. The SA Revenue Service (Sars) has taken a firm stance, seeking a writ of execution to potentially auction off the company’s assets if the debt remains unpaid. The pressure is on for Sophie Ndaba’s company to urgently settle the outstanding taxes to avoid the risk of losing its valuable assets.
Sophie Ndaba, who once graced the screens as a beloved Generations star, now faces the daunting task of resolving the tax predicament plaguing her business. With an immense amount of R23 million owed in unpaid taxes, the situation demands immediate attention. Sars is standing firm in its efforts to collect the debt and has taken steps towards the possibility of auctioning off the company’s assets should the tax liabilities persist.
Over 800 businesses in South Africa have closed their doors since the start of 2023
In June, the number of liquidations in South Africa surged by 128, as revealed by data from Statistics SA. Of these, 116 businesses chose voluntary closure, while 12 were compelled to shut down.
This brings the total count of liquidations in South Africa since the beginning of the year to 802, adding to the 151 businesses that faced liquidation in May.
However, it is noteworthy that the current number of liquidations in South Africa reflects a substantial decrease compared to the figures from 2022. Statistics SA reported an 11.7% reduction in liquidations between June 2022 and June 2023. Furthermore, there was a 17.0% decline in liquidations during Q2 2023 compared to the same period in 2022. In total, the number of liquidations dropped by 14.0% from the first half of 2022 to the first half of 2023.
Source: Stats SA
Industries Hardest Hit by Liquidations
According to the data, the financing, insurance, real estate, and business services sector bore the brunt of liquidations, with 41 businesses affected. Following closely behind were the unclassified industry with 40 liquidations and the trade, catering, and accommodation industry with 20.
Conversely, the electricity, gas, and water industry experienced no liquidations during the month, and has yet to witness any liquidations in 2023.
Over the course of the entire year, the financing, insurance, real estate, and business services industry faced the most significant impact, with 278 liquidations since the start of the year.
Source: Stats SA
Positive Economic Signals Amid Challenges
Despite the persistently challenging economic environment in South Africa, recent economic news has shown positive developments.
An evident sign of progress was the decrease in load shedding during June. Reduced demand, improved maintenance, and better performance of the nation’s coal fleet enabled Eskom to provide longer hours of electricity supply.
Consumer Price Inflation also showed a cooling trend, declining from 6.3% in May to 5.4% in June. Consequently, the South African Reserve Bank opted to keep interest rates unchanged after ten consecutive hikes.
Moreover, the BankservAfrica Economic Transactions Index (BETI), which represents the total economic transactions in the country, rose from 132.2 in May to 133.6 in June. This was the highest level since July 2022.
Although the BETI in June remained negative compared to the previous year, it showed improvement compared to previous months. The 7.4% decline in May decreased to a 2.0% decline in June, with a low-cost calculation contributing to the positive change.
BankservAfrica mentioned that the BETI’s improvement indicates a positive growth rate for Q2 2023, as the BETI from March to June saw a 2.6% improvement.
Economist Elize Kruger remarked that while many economic challenges persist, and the possibility of increased load shedding during winter remains, the improvement in the BETI does not necessarily indicate the beginning of a sustained economic recovery. However, it does suggest that the economy likely performed better in Q2 than initially anticipated.
Source: Various sources, including Stats SA and BankservAfrica