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1
Jaramba, Toddy. "Voluntary disclosure programmes and tax amnesties: an international appraisal." Thesis, Rhodes University, 2014. http://hdl.handle.net/10962/d1015666.
Full textAbstract:
Tax amnesties are government programs that typically allow a short period of time for tax evaders to voluntarily repay previously evaded taxes without being subject to penalties and prosecution that discovery of such tax evasion normally brings. Tax amnesties differ widely in terms of coverage, tax types, and incentives offered. A state’s Voluntary Disclosure Programme is another avenue available to taxpayers to assist them in resolving their state tax delinquencies. This programme is an on-going programme as compared to a tax amnesty, which is there for a limited time period only. The main goal of the research was to describe the tax amnesty and the voluntary disclosure programmes in South Africa and to assess their advantages and disadvantages. This thesis also discussed another form of voluntary disclosure programme, referred to as an Offshore Voluntary Disclosure Programme, which allows taxpayers with unreported foreign bank accounts, and presumably unreported foreign income, to voluntarily disclose their affairs. The study found that, due to tax amnesties, Government raises more tax revenue not only in the short run from collecting overdue taxes but also by bringing former non-filers back into the tax system for the long run. It was also found that, initially short-run revenue brought in from overdue taxes will be positive for the first amnesty and then decline each time the amnesty is offered repeatedly. The reason for the decline in revenue might be that tax amnesties provide incentives for otherwise honest taxpayers to start evading taxes because they will anticipate the offering of future amnesties, thereby weakening tax compliance. The costs associated with amnesty programmes include negative long run revenue impact and also that amnesty programmes reduce compliance by taxpayers in the long-run. In South Africa tax amnesties, especially the voluntary disclosure programme, are likely to be successful since they will increase the revenue yield and also bring non-filers back on the tax rolls.
2
Mahlunge, Amanda Nyasha. "The new dispensation governing the collection of Value Added Tax on electronic commerce supplies in South Africa." Master's thesis, University of Cape Town, 2014. http://hdl.handle.net/11427/12896.
Full textAbstract:
Includes bibliographical references.The primary focus of this paper is on the cross-border supply of electronic services into South Africa by non-resident e-commerce businesses. This paper will discuss the nature of electronic commerce (e-commerce) and electronic services; the impact that e-commerce has on indirect taxes such as value-added tax; the previous legislation and its shortfalls; the nature of the new legislated VAT amendments; the problems that were faced by the tax authorities in its efforts to enact the new tax VAT amendments; the problems that the South African Revenue Services (SARS) may face in enforcing compliance with the new tax legislation; the guidelines that have been put forward by the Organisation for Economic Co-operation and Development (OECD) with regard to international trade over the internet; and the measures that have been put in place in other jurisdictions that directly deal with e-commerce.
3
Schweitzer, A. G. "Aspects of the administrative law relationship between the taxpayer and the Commissioner for Inland Revenue." Master's thesis, University of Cape Town, 1991. http://hdl.handle.net/11427/22172.
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Bibliography: pages 133-135.There is an administrative law relationship between the taxpayer and the Commissioner for Inland Revenue, (hereinafter referred to as 'the Commissioner') The basis of this relationship is that the Commissioner is required to collect tax and the taxpayer is required to pay the tax. In exercising his powers under the Income Tax Act No. 58 of 1962 (hereinafter referred to as the Act), the Commissioner has been conferred with discretionary powers. In this thesis, this administrative law relationship is examined with specific reference to the means of regulating the exercise by the Commissioner of his discretionary powers. There are a number of ways in which the discretionary powers of the Commissioner may be regulated. Generally discretion may be regulated by 'rule based administrative action' (1). This means that discretionary power is exercised subject to internal rules which state how discretionary power must be exercised. Another method of regulating the exercise of discretionary power is subsumed under the category of 'adjudicative techniques of decision' (2). The essence of the latter category is that the affected person participates in the decision which affects him. The exercise of discretionary power may be regulated furthermore if the Minister who has responsibility for the Department is required to be responsible for and account publicly for the actions of his subordinate. In this thesis, examples of rule based administrative action and adjudicative techniques of decision are examined.
4
Nzombe, Kudzanayi. "Garnishee orders as a tax collection tool: a critical review of the South African and Zimbabwean models." Thesis, Rhodes University, 2017. http://hdl.handle.net/10962/8082.
Full textAbstract:
Taxation statues of most jurisdictions contain provisions that deal with defaulting taxpayers. The taxation statutes of Zimbabwe and South Africa have employed the concept of garnishee orders as a method of recovering tax. This method is codified in the respective taxation statutes under the guise of “third party appointments”, or simply “appointment of an agent”. This method is very convenient and expeditious for the tax collection authorities, namely, the Zimbabwe Revenue Authority (ZIMRA) and the South Africa Revenue Service (SARS). Other jurisdictions have also employed this method, with varying degrees of invasiveness into the taxpayers’ constitutional rights. The concept of garnishee orders can have negative constitutional implications for the taxpayers in both Zimbabwe and South Africa. In Zimbabwe, compared to South Africa, the tax collection field is not as developed in terms of jurisprudence and the legislation. There are lessons that Zimbabwe could learn from South Africa, considering that the latter has experienced more than two decades of constitutional democracy. Therefore, in order to identify areas for development, the two jurisdictions are critically reviewed, with particular attention to the legislative provisions and case law dealing with garnishee orders in the tax collection context. Approaches employed by other countries in relation to similar concepts and provisions are also analysed. The lessons learned from this analysis could suggest a less invasive method of recovering tax from defaulting taxpayers and an approach to be followed by the tax authorities, ZIMRA and SARS that would allow them to fulfil their responsibilities and mandate with taxpayer-friendly measures.
5
Theron, Nico. "A comparative study of value added tax collection methods in the context of e-commerce and virtual worlds from a South African perspective." Diss., University of Pretoria, 2012. http://hdl.handle.net/2263/26408.
Full textAbstract:
E-commerce and transactions in virtual worlds has monetary value and may lead to actual cash flows. Where real money trade occurs tax authorities are bound to seek ways and means in which to levy and collect taxes (Pienaar, 2008:38). Previous research on the application of the South African income tax laws to transactions in virtual worlds has been conducted. The application of the charging section of the value added tax laws in South Africa has also been researched in the context of e-commerce and transactions in virtual worlds. Limited research has been conducted on the actual value added tax collection methods in the context of e-commerce and transactions in virtual worlds. This study critically analyses the value added tax collection methods employed in South Africa in the context of ecommerce and transactions in virtual worlds and compares the extent of its application to the extent of the goods and services tax collection methods’ application employed in Australia in this context. The study concludes that that the value added tax collection methods employed in South Africa and the goods and services tax collection methods employed in Australia are similar. Special rules have been adopted in Australia to ensure goods and service taxes are collected on the supply electronic goods. This is not the case in South Africa. However, in the case of transactions in virtual worlds, both countries’ collection methods struggle in ensuring value added tax and goods and service taxes is collected where the supplier of a virtual item is foreign in relation to South Africa or Australia. AFRIKAANS : E-commerce en transaksies in virtuele wêrelde het monetêre waarde en mag in sekere omstandighede kontantvloeie tot gevolg bring. Wanneer regte geld verhandel word sal belasting owerhede altyd maniere soek om belasting the hef op die onderliggende transaksies en dit in te vorder (Pienaar, 2008:38). Vorige navorsing rakende die toepassing van die Suid Afrikaanse inkomste belasting wetgewing in virtuele wêrelde is al voorheen gedoen. The toepassing van die heffings artikel in the belasting op toegevoegde waarde (BTW) wetgewing op e-commerce en transaksies in virtuele wêrelde was ook al vorheen nagevors. Min navorsing was gevind wat aleenlik fokus op die invorderings meganismes in die BTW wetgewing in die konteks van transaksies in virtuele wêrelde en e-commerce. Hierdie studie analiseer krities die toepassing van die invorderings meganismes in die Suid Afrikaanse BTW wetgewing in die konteks van e-commerce en transaksies in virtuele wêrelde en vergelyk die toepassing daarvan met die toepassing van die Australiaanse goods and services tax wetgewing se invorderings meganismes in dieselfde konteks. Die studie lig uit dat die twee lande se invorderings meganismes baie dieselfde is. The Australiaanse wetgewing maak egter spesiale voorsiening vir lewerings met betrekking tot e-commerce. Dit is nie die geval in Suid Afrika nie. Met betrekking tot transaksies in virtuele wêrelde sukkel beide lande se invorerings meganismes om seker maak dat BTW en goods and services tax ingevorder word waar die verskaffer nie Suid Afrikaans of Australiaans is nie.Dissertation (MCom)--University of Pretoria, 2012.
Taxation
unrestricted
6
Tarrant, Greg. "The distinction between tax evasion, tax avoidance and tax planning." Thesis, Rhodes University, 2008. http://hdl.handle.net/10962/d1004549.
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Tax avoidance has been the subject of intense scrutiny lately by both the South African Revenue Service ("the SARS") and the media. This attention stems largely from the recent withdrawal of section 103(1) together with the introduction of section 80A to 80L of the South African Income Tax Act. However, this attention is not limited to South Africa. Revenue authorities worldwide have focused on the task of challenging tax avoidance. The approach of the SARS to tackling tax avoidance has been multi-faceted. In the Discussion Paper on Tax Avoidance and Section 103 (1) of the South African Income Tax Act they begin with a review of the distinction between tax evasion, tax avoidance and tax planning. Following a call for comment the SARS issued an Interim Response followed by the Revised Proposals which culminated in the withdrawal of the longstanding general anti-avoidance rules housed in section 103(1) and the introduction of new and more comprehensive anti-avoidance rules. In addition, the SARS has adopted an ongoing media campaign stressing the importance of paying tax in a country with a large development agenda like that of South Africa, the need for taxpayers to adopt a responsible attitude to the management of tax and the inclusion of responsible tax management as the greatest measure of a taxpayer's corporate and social investment. In tandem with this message the SARS have sought to vilify those taxpayers who engage in tax avoidance. The message is clear: tax avoidance carries reputational risks; those who engage in tax avoidance are unpatriotic or immoral and their actions simply result in an unfair shifting of the tax burden. The SARS is not alone in the above approach. Around the world tax authorities have been echoing the same message. The message appears to be working. Accounting firms speak of a "creeping conservatism" that has pervaded company boardrooms. What is not clear, however, is whether taxpayers, in becoming more conservative, are simply more fully aware of tax risks and are making informed decisions or whether they are simply responding to external events, such as the worldwide focus by revenue authorities and the media on tax avoidance. Whatever the reason, it is now critical, particularly in the case of corporate taxpayers, that their policies for tax and its attendant risks need to be as sophisticated, coherent and transparent as its policies in all other areas involving multiple stakeholders, such as suppliers, customers, staff and investors. How does a company begin to set its tax philosophy and strategic direction or to determine its appetite for risk? A starting point, it is submitted would be a review of the distinction between tax evasion, avoidance and planning with a heightened sensitivity to the unfamiliar ethical, moral and social risks. The goal of this thesis was to clearly define the distinction between tax evasion, tax avoidance and tax planning from a legal interpretive, ethical and historical perspective in order to develop a rudimentary framework for the responsible management of strategic tax decisions, in the light of the new South African general anti-avoidance legislation. The research methodology entails a qualitative research orientation consisting of a critical conceptual analysis of tax evasion and tax avoidance, with a view to establishing a basic framework to be used by taxpayers to make informed decisions on tax matters. The analysis of the distinction in this work culminated in a diagrammatic representation of the distinction between tax evasion, tax avoidance and tax planning emphasising the different types of tax avoidance from least aggressive to the most abusive and from the least objectionable to most objectionable. It is anticipated that a visual representation of the distinction, however flawed, would result in a far more pragmatic tool to taxpayers than a lengthy document. From a glance taxpayers can determine the following: That tax avoidance is legal; that different forms of tax avoidance exist, some forms being more aggressive than others; that aggressive forms of tax avoidance carry reputational risks; and that in certain circumstances aggressive tax avoidance schemes may border on tax evasion. This, it is envisaged, may prompt taxpayers to ask the right questions when faced with an external or in-house tax avoidance arrangement rather than simply blindly accepting or rejecting the arrangement.
7
Fourie, Michiel Philippus Willem. "Attracting investment into South African property investment vehicles : evaluating tax." Diss., University of Pretoria, 2010. http://hdl.handle.net/2263/24354.
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South African property investment vehicles consist of collective investment schemes in property (CISPs), also known as property unit trusts (PUTs) and property loan stock (PLS) companies. The application of sections 25B(1), 11(s), 10(1)(k)(i)(aa) and 64B(5)(b) of the Income Tax Act 58 of 1962 (“the Act”) and paragraph 67A(1) of the Eighth Schedule to the Act result in these property investment vehicles being taxed based on their legal form, that of a trust versus a company, rather than on their common purpose. The South African Revenue Service recognised these inconsistencies in the 2007/8 budget tax proposals and proposed that it be reviewed. In December 2007, National Treasury released a discussion paper on the reform of the listed property investment sector in South Africa. The discussion paper is aimed at adopting a real estate investment trust (REIT) regime in South Africa to make South African property investment vehicles more attractive to foreign investors as well as to address the current tax inconsistencies and fragmented regulation of the South African listed real estate sector. In this study, the current inconsistent tax treatment of these property investment vehicles is reviewed, both as to how they apply to the property investment vehicle and to their respective investors. This study further reviews how REITs in selected other countries are regulated and taxed and National Treasury’s proposals as to how REITs applicable in South Africa should be regulated and taxed. CopyrightDissertation (MCom)--University of Pretoria, 2010.
Taxation
unrestricted
8
Salmon, Catherine Anne. "An analysis of the income tax treatment of South African collective investment schemes in securities." Master's thesis, University of Cape Town, 2013. http://hdl.handle.net/11427/5902.
Full textAbstract:
Includes abstract.Includes bibliographical references.
This dissertation analyses the legal nature of the relationship between a South African collective investment scheme in securities and the investors in such a scheme and on the basis of these findings identifies how the income tax treatment of such schemes differs, in law and in practice, from the tax treatment which would apply in the absence of any specific provisions in the Income Tax Act relating to these parties.
9
Mpinganjira, Peter F. "Tax gap reduction strategy in South Africa." Thesis, University of Manchester, 2008. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.627954.
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This dissertation presents the findings of a research study that has identified the main ways in which South African large companies in the manufacturing sector avoid taxes and measures the size of the tax gap. Specifically the study examines the motor vehicle manufacturers, automotive component manufacturers and packaging manufacturers. The study primarily deals with tax avoidance arising from transfer pricing manipulations among both foreign owned and South African owned Multinational Enterprises (MNEs). The literature review covered in the study includes; public value and strategic management in the public sector; measuring the tax gap; compliance risk management; tax avoidance; General Anti-avoidance Rules (GAARs); transfer pricing and competition for foreign direct investment (FDI). The study presents rich data collected from nine case studies for the period 1998 to 2005. The key findings for this period include; (i) The tax gap is estimated at 214% and 30% of the taxes declared and paid on a timely basis by the car manufacturing sector and the packaging manufacturing sector respectively. (ii) The estimated amount of money lost from the South African economy through manipulation of transfer prices is R39.565 billion (about £2.6 billion) with corporate income tax implications of R14.404 billion (£960 million). (iii) For every R1 of motor industry programme incentive given to three car manufacturers (excluding VAT refunds), the government has lost approximately R2 through transfer pricing. (iv) FDI appears to have taken more out of the South African economy than it had put in, Some analyses show that there is negative invested capital among the three car manufacturers. (v) Foreign-controlled multinational enterprises avoided more taxes than SA-controlled multinationals. The taxes avoided by foreign-controlled multinationals represented 4.56% of the company turnover between 1998 and 2005 while the taxes avoided by SA-controlled multinational enterprises were 0.69% of turnover. (vi) Statistically, in the car manufacturin'g sector, there is a strong positive correlation of 87% between the amount of taxes avoided and the amount of annual incentive bonuses approved by the parent companies for distribution among employees of the SA subsidiaries, including some senior management. In a regression analysis, the amount of taxes avoided explains 75% of the variability in the level of incentives bonuses. The study recommends that the SA Government should set up an 'Incentive Risk Management' committee. It calls for more contact and dialogue between the Commissioner of South African Revenue Service (SARS) and the CEOs of the car manufacturers and encourages the setting up of an Enforcement Centre of Excellence within SARS. It also provides suggestions on reducing the tax gap and recovering lost taxes while effectively managing the threat of disinvestment or capital flight.
10
Lelope, Matome Rotley. "Penalties for impermissible tax avoidance in South Africa." Diss., University of Pretoria, 2016. http://hdl.handle.net/2263/60059.
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Tax avoidance is a complex concept that creates uncertainty in the South African tax law system and results in revenue loss. Tax avoidance is a broad concept that constitutes permissible tax avoidance and impermissible tax avoidance. The main difference between impermissible tax avoidance and permissible tax avoidance is that the former is illegal and the latter is legal. To deal with, amongst other problems caused by impermissible tax avoidance, revenue loss, South Africa introduced the GAAR to curb impermissible tax avoidance. In doing so, the GAAR rejects tax avoidance arrangements that are found to be abusive and allows permissible tax avoidance.
The South African GAAR is aimed at curbing impermissible tax avoidance arrangements that, inter alia, result in tax benefits with the sole or main purpose to obtain that tax benefit. The problem with this GAAR is that it does not clearly differentiate between permissible tax avoidance and impermissible tax avoidance. A taxpayer who gets caught by the GAAR is subjected to the provisions of section 80B of the ITA. The consequences in section 80B are corrective measures and do not result in any disincentive to the taxpayer except that the taxpayer only pays the amount of tax that would have been due in the absence of the avoidance arrangement.
This research is aimed at investigating the effectiveness of the GAAR as a weapon against impermissible tax avoidance. In testing the effectiveness of the GAAR, the remedies available against taxpayers that enter into impermissible tax avoidance transactions are critically analysed. The South African GAAR is compared to three foreign GAAR?s and it is recommended that South Africa consider introducing penalties as is the case in other countries such as Australia and the UK. In investigating the effectiveness of the GAAR as a weapon against impermissible tax avoidance, foreign legislation and case law is compared to South African legislation and case law in order to determine whether South African GAAR needs penalties to deter impermissible tax avoidance more effectively.Mini Dissertation (LLM)--University of Pretoria, 2016.
Mercantile Law
LLM
Unrestricted
11
Wicht, Melissa Sophia. "The tax implications of Bitcoin in South Africa." Diss., University of Pretoria, 2016. http://hdl.handle.net/2263/60114.
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Bitcoin is a virtual crypto-currency that exists solely in electronic form.1 Bitcoin was first launched in 2009 by Satoshi Nakamoto, which is an alias for a programmer or group of programmers.2 Bitcoin is defined as ?a digital, decentralized, partially anonymous currency, not backed by any government or other legal entity, and not redeemable for gold or other commodity?.3
Virtual currency is a type of fund used and accepted in a virtual or online community.4
Generally Bitcoin has been and is visible in South Africa (?SA?). It is more apparent in Cape Town.5 The first commercial conference on Bitcoin was held in Cape Town on April 20156 and BitHub, a virtual currency hub and incubator, was launched by the Cape Innovation and Technology Initiative in June 2015.7 On 7 September 2015, BitHub had a series of education Bitcoin courses which provided students with basic understanding of Bitcoin.8
The use of Bitcoins as a medium of exchange is not yet widespread in SA, however, it has been noted that this industry is growing at a fast rate as several online retailers are now accepting Bitcoins as a means of payment for goods and services, for example Takealot.com.9 SA has already installed its first Bitcoin vending machine, situated in Kyalami, north of Johannesburg, to give users the ability to get Bitcoins in exchange for rand.10
South African authorities have been silent on how bitcoin transactions should be taxed and even regulated. Research on this matter is relatively limited in South Africa. Studies are thus needed and are relevant to address the South African taxation implications of bitcoin exchange transactions as countries such as Australia and the USA have already issued guidelines to taxpayers in this regard.
The primary research objective of this study was to comparatively explore how Bitcoins should be classified in SA from a tax perspective. A comparative study was therefore performed to understand the current tax position in SA with regards to the classification of Bitcoins either as an asset or currency for Bitcoin transactions that may result in taxable income.
The research has limitations in that it did not look at cross-border tax evasion, collection of taxes, permanent establishment rules and the enforcement of taxes on Bitcoin transactions. Tax legislation is vast in SA and therefore every type of transaction could not be analysed due to the extensive nature of tax.
It was found that the current SA legislation does make provision for the classification of Bitcoin. However, it is suggested that SA authorities amend certain legislative requirements to cater for Bitcoin, as well as issue appropriate guidelines for the treatment of Bitcoin transactions, as was done in the U.S. and Australia.Mini Dissertation (LLM)--University of Pretoria, 2016.
Mercantile Law
LLM
Unrestricted
12
Mahuma, Keaobaka Percival. "A group income tax system for South Africa." Master's thesis, University of Cape Town, 1997. http://hdl.handle.net/11427/17345.
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Bibliography: pages [115]-120.This thesis establishes a group income tax system for South Africa so that equity may be achieved between the burden of company income tax borne by shareholders who invest in companies that are structured through subsidiaries and shareholders that invest in companies that are structured through divisions. For example, intercompany profits and losses of a revenue nature are subject to income tax whereas interdivisional profits or losses of a revenue nature are not subject to income tax. Also, tax losses incurred by a company are not deductible from taxable income of other companies within the same group whereas in the case of a company that is structured through divisions losses incurred by a division are deductible from income of other divisions of the same company. The study is classified as 'microcomparison' whereby legal problems that exist in one country are studied on a comparative legal basis. Accordingly, the objective of the thesis is achieved by undertaking a comparative study of group income tax law in the United Kingdom and United States of America for equitable group income tax treatment of problems that exist within the current South African company income tax system. First, the definition of 'a group' is established, after which a group income tax treatment of group transactions and tax losses is established to eliminate the inequities that are inherent in the South African income tax system. Throughout the study it is demonstrated that these inequities exist in spite of the current income tax avoidance provisions (for example s103 and the connected persons rules). The conclusions made in the study indicate that the inequity that exists in the South African company income tax system should be eliminated.
13
Roberts, Justin Esrom. "The proposed new gambling tax in South Africa." Thesis, Nelson Mandela Metropolitan University, 2011. http://hdl.handle.net/10948/1639.
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In the 2011/2012 Budget Speech delivered by the Minister of Finance, Pravin Gordhan, it was announced that a 15% withholding tax on gambling winnings above R 25 000 was to be introduced with effect from 1 April 2012. This treatise was undertaken to critically analyse the different elements of the proposed new withholding tax. It was established that the fiscus already benefits significantly from the gambling industry and levies and taxes from the gambling industry dwarf the revenue SARS collect from other forms of taxes such as Donations tax and Estate Duty tax. The necessity, therefore, of taxing gambling winnings in the hands of the individual is debatable. A comparison with the three foreign countries used by the Minister as an example of countries who have successfully implemented a withholding tax on gambling winnings exposed operational or other characteristics which bear no significant relationship to the situation in which the industry operates in South Africa. Probably the most significant difference is the fact that in the three foreign countries, losses are deductible and only the net gains are taxed. Although it iv could add to an already seemingly administrative-intensive legislation, it is submitted that taxing gambling winnings and ignoring losses suffered by gamblers will be disproportionately unfair towards the taxpayer. The many questions raised in this treatise illustrate the level of uncertainty still surrounding the new proposed gambling tax. It is hoped that communication will be provided by SARS as soon as possible to address the issues at hand. This would go a long way in ensuring that the implementation of the proposed withholding tax on gambling winnings is as smooth and efficient as possible.
14
Froom, Natalie Marie. "Domestic tax law v double tax treaties in the context of controlled foreign companies." Thesis, Nelson Mandela Metropolitan University, 2014. http://hdl.handle.net/10948/3559.
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The South African fiscal legislators have found it necessary to introduce anti-avoidance legislation which governs controlled foreign companies in order to counteract schemes devised by taxpayers where companies are established outside South Africa for the purpose of diverting income from the South African fiscal net. Whilst the enforcement of such legislation does have merit in that the intention behind the introduction of such domestic legislation is to prevent the erosion of the South African tax base, it is submitted that this does pose a problem from an international perspective. The objective of this treatise is to conduct a critical analysis of how compatible the South African fiscal legislation which governs controlled foreign companies is with the provisions of the double taxation agreement as prescribed in terms of the OECD Model Tax Convention (which was published in July 2010). In addition, the aim of this study is to deduce whether the purpose of the double taxation agreement is not only the avoidance of juridical double taxation but also that it addresses the avoidance of economic double taxation. This will assist in determining whether domestic controlled foreign company legislation (as embodied in section 9D of the Income Tax Act 58 of 1962) conflicts with the purpose of the double taxation agreement. By conducting an extensive research study and by depicting a certain scenario which addresses the issue at hand, the following is concluded: The tax treatment of the business profits generated by a controlled foreign company resident in a State outside South Africa and which have been generated from active business operating activities, is held to be in agreement with the provisions of the double taxation agreement. By contrast, the tax treatment of the controlled foreign company’s passive income in the form of interest income, is found not to correlate with the aforesaid agreement. As will be demonstrated in the chapters that follow, the controlled foreign company’s interest income is subjected to economic double taxation in terms of the scenario depicted in this treatise. This means that such income is taxed twice in the hands of two different taxpayers in two different States. As a result of this it is submitted that the following problem arises: Because section 9D of the Income Tax Act causes economic double taxation to occur (as illustrated in the previous paragraphs) and owing to the fact that the purpose of the double taxation agreement is the avoidance of economic double taxation, it can be shown that the section 9D domestic legislation conflicts with the terms of the double taxation agreement. This conflict is considered to be an area of concern because a contravention of the purpose of the double taxation agreement is regarded as a breach of the Contracting States’ international obligations in terms of the aforesaid agreement. It is further submitted that paragraph 23 of the OECD Commentary on article 1 and paragraph 14 of the OECD Commentary on article 7 are incorrect when they express the sentiment that domestic controlled foreign company legislation does not conflict with the provisions of the double taxation agreement. It is proposed that this be corrected to state the contrary.
15
Grebe, Alta-Mari. "The income tax implications resulting from the introduction of section 12N of the Income Tax Act." Thesis, Nelson Mandela Metropolitan University, 2014. http://hdl.handle.net/10948/d1020787.
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Section 12N, introduction into the Income Tax Act by way of Taxation Laws Amendment Act and which became effective on 2 November 2010, provides for allowances on the leasehold improvements on government-owned land and land leased from certain tax exempt entities as stipulated in section 10 (1) (cA) and (t). As section 12N deems the lessee to be the owner of the leasehold improvement, the lessee now qualifies for capital allowances which were previously disallowed.
16
Mabele, Katlego Oliva. "The income tax implications of becoming a republic resident." Thesis, Nelson Mandela Metropolitan University, 2016. http://hdl.handle.net/10948/14521.
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The aim of this treatise is to identify the income tax implications of the persons becoming South African tax residents. It will provide a clear understanding of the income tax implications for natural and non-natural persons wishing to take up residence in South Africa. The definition of “resident” in section 1 of the Income Tax Act, 1962, has a direct impact on the tax implications bearing down on any foreigner planning to reside within the Republic of South Africa, especially in relation to the prevention of the double taxation. The following issues or areas have been identified, these issues are summarised below. The persons receiving foreign pensions may be exempt from normal tax under section 10 (1)(gC) and in terms of the tax treaty, they may also escape taxation in their former country of residence. The treatise will look at various treaties that exist between the South Africa and other countries and to discuss the taxing rights. There is a case of double non-taxation and good reason for immigrants to come and avoid tax in South Africa. It is suggested that the legislation and the double tax agreements should be amended. A person who becomes a resident will receive a step-up in base cost for assets other than South African immovable property and assets of a permanent establishment in South Africa under paragraph 12(2)(a) of the Eighth Schedule. The main purpose of the legislation is to ensure that these assets are correctly valued, determining the base cost, when the person becomes a tax resident. The valuation of these assets carries with it the problem of securing sufficient evidence long after the valuation. Most of the tax planning for such for immigrants revolves around estate duty and donations tax. The person would donate his assets to an offshore discretionary trust before taking up residence in South Africa. The advantage is that donations tax will be avoided because there are exemptions in terms of section 56, for assets acquired before becoming a resident. The income and capital gains vested in nonbeneficiary can be taxed in the hands of the donor in terms of section 7 and paragraph 72 of the Eighth Schedule. The donor should be aware of the antiavoidance measures; section 7(2) to 7(8) and paragraph 72 of the Eighth Schedule will deem a different person other than the person who is entitled to the income to be taxable on that person. The income and gains received by the beneficiary of a trust can be taxable in the hands of the donor. The assets owned by the trust will be sheltered from South African estate duty. The foreign discretionary trust, as a non-resident, will not be liable for tax in South Africa. The beneficiaries of such a trust will be liable for income tax from the trust distributions, once they have acquired a vested right to the income. The liability of income tax is deferred to the year when the trustees decide to make distributions. The distribution by the trustees in a subsequent year creates a delay or postponement for taxes which should be paid by the beneficiaries. The trustees are most likely to make distributions in a tax year when the tax rates are low. There are tax opportunities for the immigrants who intend to take up residence. The tax resident might be subject to withholding taxes on foreign income from the previous country of residence, but might be subject to Double Tax Agreement between South Africa and other countries.
17
Ferreira, Melanie. "The distinction between types of commercial and residential property for value-added tax purposes in South Africa." Thesis, Nelson Mandela Metropolitan University, 2012. http://hdl.handle.net/10948/d1008710.
Full textAbstract:
It is important to distinguish between types of commercial and residential property for value-added tax (VAT) purposes. The reason for this is because the supply of residential property may be exempt from VAT in certain cases, whereas the supply of commercial property is a taxable supply. One of the aims of this treatise was to generate some characteristics that can assist vendors to distinguish between types of commercial and residential property for VAT purposes. SARS proposed numerous changes to the VAT Act with regards to fixed property in 2011. This treatise explains the reason for the changes made and also comments on them. Firstly, property developers previously had to account for an output tax adjustment when they changed the use of their property i.e. from a taxable use (selling the completed units) to a non-taxable use (renting the completed units as a residential dwelling). This „output tax adjustment‟ sometimes places developers in a financial dilemma, especially in times of an economic depression. SARS therefore provided „developers‟ as defined with a short term solution. This short term solution provides property developers with a 36 month temporarily relief period, before they have to account for the „output tax adjustment‟. Therefore, the new section 18B was proposed to assist property developers in times of an economic recession. Secondly, in the past a vendor who acquired a property from a non-vendor to make taxable supplies was allowed a notional input tax deduction, limited to the transfer duty paid. SARS has however "delinked VAT from transfer duty‟, which means that the notional input tax deduction will no longer be limited to the transfer duty paid. This change may benefit vendors as they may now be allowed a bigger input tax deduction. Furthermore, the treatise also compares the VAT treatment of the above issues to that of the goods and services tax treatment in New Zealand. The treatise concludes with a summary of all distinguishing characteristics identified and other findings noted.
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Smit, Jacobus Gideon. "Analysis of the interaction between the income tax and capital gains tax provisions applicable to share dealers." Thesis, Stellenbosch : Stellenbosch University, 2013. http://hdl.handle.net/10019.1/85830.
Full textAbstract:
Thesis (MAccounting)--Stellenbosch University, 2013.ENGLISH ABSTRACT: The interaction between the income tax provisions contained in sections 9B, 9C, 11(a) and 22 of the Income Tax Act No. 58 of 1962 (the Act), and the capital gains tax (CGT) provisions of the Eighth Schedule of the Act, are complex and share dealers should approach the tax consequences of share dealing profits with caution. The objective of the assignment was to ensure that the share dealing profits of share dealers (who transact on revenue account) are taxed correctly, with specific reference to the interaction between the aforementioned provisions. This was achieved by considering tax cases, the interpretation notes of the South African Revenue Services (SARS) and commentary of tax writers. Examples of share disposals were incorporated to illustrate that consistency is required between the calculation of profits for income tax and CGT purposes. The guidelines laid down by case law to determine the revenue nature of share disposals were investigated. It was concluded that share dealing profits which are designedly sought for and worked for, either as part of a business operation or not, are of a revenue nature and taxable as such. The method of identification of shares sold as trading stock is important when calculating the income tax profit, since it is used in order to determine both which shares are sold as well as the cost of the shares sold. It was concluded that the method of identification applied in terms of generally accepted accounting practice (GAAP) is generally also acceptable from an income tax perspective. Section 9C of the Act provides a share dealer income tax relief when a ‘qualifying share’ is disposed of. Any amount received or accrued as a result of the disposal of a qualifying share is deemed to be of a capital nature, regardless of the revenue intention of the share dealer. Prior to 1 October 2007, section 9B of the Act provided similar relief to the disposal of an ‘affected share’. It was concluded that section 9C of the Act has a wider scope of application compared to section 9B of the Act. Because the proceeds received on the disposal of affected or qualifying shares are excluded from gross income, the acquisition costs previously incurred and deducted in respect of such shares must be included in taxable income. It was determined that the amount to be included in income is the actual cost of such shares and not the opening trading stock value determined in terms of GAAP and claimed in terms of section 22(2) of the Act. It was concluded that the first-in-first-out (FIFO) method of identification should be applied to determine which affected or qualifying shares have been disposed of. From a CGT perspective, it was illustrated that a share dealer loses the opportunity to choose which identification method to apply and is obliged to also apply the FIFO method in calculating the CGT base cost of the shares. It is concluded that the Eighth Schedule of the Act should be amended to clarify that the FIFO method should be applied for CGT purposes where sections 9B or 9C of the Act find application. Only then will the tax profits of a share dealer be in sync with his or her cash benefit.
AFRIKAANSE OPSOMMING: Die interaksie tussen die inkomstebelastingbepalings vervat in artikels 9B, 9C, 11(a) en 22 van die Inkomstebelastingwet No. 58 van 1962 (die Wet), en die kapitaalwinsbelastingbepalings (KWB bepalings) van die Agtste Bylae tot die Wet is kompleks en aandelehandelaars moet die belastinggevolge van aandelewinste met omsigtigheid benader. Die doelwit van die werkstuk was om te verseker dat die winste van aandelehandelaars (wat aandele verkoop op inkomsterekening) korrek belas word, met spesifieke verwysing na die interaksie tussen die voorgenoemde bepalings. Dit is bereik deur die oorweging van hofsake, uitlegnotas van die Suid-Afrikaanse Inkomstediens en kommentaar deur belastingskrywers. Voorbeelde van aandeleverkope is gebruik om te illustreer dat konsekwentheid tussen die berekening van winste vir inkomstebelasting en KWB-doeleindes ‘n vereiste is. Die riglyne wat deur regspraak daargestel is om die inkomste-aard van aandeleverkope vas te stel, is ondersoek. Daar is bevind dat aandelewinste wat opsetlik nagejaag word en voor gewerk word, ongeag of dit deel van die bedryf van 'n besigheid is al dan nie, van ‘n inkomste-aard is en aldus belasbaar is. Die metode van identifikasie van aandele wat as handelsvoorraad verkoop word is belangrik by die berekening die inkomstebelastingwins aangesien dit gebruik word om vas te stel watter aandele verkoop is en wat die koste van die verkoopte aandele is. Daar is bevind dat die metode wat ingevolge algemeen aanvaarde rekeningkundige praktyk (AARP) toegepas is, gewoonlik ook vir inkomstebelastingdoeleindes toelaatbaar is. Artikel 9C van die Wet verskaf aan ‘n aandelehandelaar inkomstebelastingverligting met die verkoop van 'n 'kwalifiserende aandeel' deurdat die bedrag ontvang of toegeval geag word van 'n kapitale aard te wees, ongeag die inkomstebedoeling van die aandelehandelaar. Voor 1 Oktober 2007 het artikel 9B van die Wet soortgelyke verligting verskaf met die verkoop van n 'geaffekteerde aandeel’. Daar is vasgestel dat artikel 9C van die Wet 'n wyer toepassing het in vergelyking met artikel 9B van die Wet. Omrede die opbrengs ontvang met die verkoop van geaffekteerde of kwalifiserende aandele uitgesluit word van bruto inkomste, moet die vorige aankoopskostes wat voorheen ten opsigte van die aandele aangegaan en afgetrek is, by belasbare inkomste ingesluit word. Daar is bepaal dat die bedrag wat by belasbare inkomste ingesluit word, die werklike koste van die aandele is en nie die AARP openingswaarde van handelsvoorraad wat ingevolge artikel 22(2) van die Wet geëis nie. Daar is bevind dat die eerste-in-eerste-uit (EIEU) metode van identifikasie gebruik moet word om te bepaal watter geaffekteerde of kwalifiserende aandele verkoop is. Vir KWB doeleindes verloor 'n aandelehandelaar ook die geleentheid om te kan kies watter identifikasiemetode toegepas moet word. Hy of sy is verplig om die EIEU metode toe te pas in die berekening van die KWB basiskoste van die aandele. Daar word tot die gevolgtrekking gekom dat die Agtste Bylae van die Wet gewysig moet word om te bevestig dat die EIEU metode toegepas moet word vir KWB doeleindes waar artikels 9B of 9C van die Wet van toepassing is. Slegs dan is die belasbare wins van 'n aandelehandelaar in lyn is met sy of haar kontantvoordeel.
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Blom, Okkie Johannes Jacobus. "The legal status of tax treaties in South Africa." Diss., University of Pretoria, 2017. http://hdl.handle.net/2263/62558.
Full text
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Singh, Shalona. "The tax consequences of income and expenses arising from illegal activities." Thesis, Rhodes University, 2018. http://hdl.handle.net/10962/59456.
Full textAbstract:
Income tax in South Africa is levied in terms of the Income Tax Act, 58 of 1962 (the South African Income Tax Act) on taxable income, which by definition, is arrived at by deducting from ''gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The South African Income Tax Act provides no guidance with regard to the taxation of income and expenditure from illegal activities. In this mini thesis, case law and legislation is reviewed in an attempt to provide clarity on the tax consequences of income and expenses arising from illegal activities. An overview is provided of the taxation of income and expenditure in respect of illegal activities in the United States of America, Australia and New Zealand. Similarities are found between the American, Australian, New Zealand and South African tax regimes in relation to the taxation of income earned from illegal activities, but there appears to be more certainty in America, Australia and New Zealand with regard to the deduction of expenses arising from illegal activities. In South Africa, taxpayers earning income from ongoing illegal activities will, in principle, comply with the definition of “trade” as defined in section 1 of the South African Income Tax Act. However, this is contrary to the view of the South African Revenue Service that illegal activities do not meet the definition of “trade”, a viewpoint that may not hold if challenged in court. Recommendations are made for the amendment of the South African Income Tax Act to specifically provide for the inclusion in “gross income” of income from illegal activities and to prohibit the deduction of expenditure arising from illegal activities.
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Adams, Razeen. "Group taxation of tightly-held qualifying groups in South Africa." Master's thesis, Faculty of Commerce, 2019. http://hdl.handle.net/11427/31306.
Full textAbstract:
Currently, companies are taxed on an individual basis in South Africa and there is no provision for the offsetting of profits and losses of different companies within a tax group. Admittedly, businesses have the option to operate under a single divisionalised entity whereby they are able to enjoy offsetting profit and losses of trades of different divisions within such an entity. There are however, strong business reasons as to why businesses split themselves into separate legal entities. The most noteworthy benefit being the ability to manage business risk through limited liability provisions contained in corporate legislation. Arguments have been put forward to the effect that groups, although legally separated through different corporate entities, operate in much the same way as a divisionalised single entity business does. The current tax treatment, which taxes entities of a group on their individual taxable incomes, is therefore argued to not provide a true assessment of the group’s tax position. Arguments in the Margo Commission of Inquiry report have even gone as far as saying that it seems unfair to tax profitable entities in a group while the overall taxable income of the group may be negative. With the above in mind, the question of whether a group tax system would be suitable for implementation in South Africa is brought to the table. As will be seen in this dissertation, there are strong opinions on either side of determining whether a group tax system would be appropriate for South Africa. Opinions in favour of a group tax system view the system as a potential tool to encourage business through more favourable tax conditions thereby encouraging growth and development of the economy. Drawbacks of the system include the perceived loss to the fiscus as tax relief is provided while concerns have also been raised relating to the current ability of the South African Revenue Service (SARS) to cope with the implementation of such a change to legislation. The author of this dissertation acknowledges the need for South Africa to maximise its revenue collection to meet its budgetary obligations. However, at the same time, the author is of the view that government should look to creating environments in which smaller businesses may develop and grow, potentially increasing revenue collection in the long run in any event. For these reasons, the author has taken a conservative approach to explore the idea of providing for a group tax system for tightly‐ held tax groups with a limited turnover. This could potentially have the effect of developing small businesses while limiting the exposure of the fiscus to a revenue collection reduction. Loosely defined, tightly‐held groups of companies refer to groups where there is a close relation between shareholders of the group. Further to this, the author highlights the challenges that small businesses face in moving towards a group structure to derive the benefits that have been identified in this dissertation. With that in mind, the author has looked to encouraging group formation in small businesses by attempting to relieve some of the challenges that small businesses encounter in trying to establish a group structure. Through this dissertation, the author proposes a group tax system whereby only tightly‐held qualifying groups will be allowed to participate. The proposal contained within the dissertation has been drafted after assessing the findings of the preceding chapters as well as adapting some of the implementation provisions provided by the United Kingdom (UK) and the United States of America (USA) tax legislation. This ability to produce a suitable proposal for implementation in South Africa will be a step towards concluding on whether South African tax legislators should be looking to implement a group tax system whereby tightly‐held groups of companies will be the initial qualifying audience. The conclusion drawn through the research conducted is that steps should be taken towards the implementation of group tax for tightly‐held groups of companies. A stumbling block, however, as identified in the interim Nugent Commission report, is the current state that SARS finds itself in. It would seem reckless to recommend the instatement of a provision of this stature while SARS is in its current state. It is thus concluded, that movement towards a group tax system for tightly‐held groups of companies should be delayed until such time that SARS has re‐established itself as a proficient organ of the state.
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Albanie, Sylvester. "Shareholder wealth effects of convertible bond announcements in South Africa." Master's thesis, Faculty of Commerce, 2019. http://hdl.handle.net/11427/31239.
Full textAbstract:
This study examines shareholder wealth effects of convertible bond announcements in South Africa for the period 2004 to 2017. The data shows that South African companies issue convertible bonds for several reasons and that issues are not only South African rand denominated, but are in other currencies as well. However, a review of the convertible bond announcements show that the majority of convertible bonds were issued in local currencies. In addition to the currency of issue, the study also shows that the majority of the stated practical uses of the proceeds was to finance corporate general purposes (47%, i.e. 7 of the 15 in the final sample) and the repayment of debt (, i.e. 47% that is, 7 out of 15). Contrary to prior studies in Korea and Japan, the results of this current study show that the use of proceeds towards project financing and capital expenditure ranked the least. Empirically, various t- tests were conducted to examine statistical significance of the wealth effects of convertible bond announcements. The findings from the various tests performed consistently showed that the announcements had significant negative price reactions. First, the findings shows that the announcements of convertible bonds in general (that is without distinction) had significant negative price reactions. The announcements in general, had significant negative wealth effects irrespective of whether the announcements were based on local or foreign currency. The results also show that the mean cumulative abnormal returns (CARs) of the issues denominated in rand value were more negative than those made in other currencies. In addition, further tests also show that the mean CARs based on the stated use of proceeds were significantly negative irrespective of whether the issues were for corporate general purpose or for the repayment of debt. Overall, the study shows that convertible bond issues in South Africa have a significant negative CARs around the announcement date.
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Mosupye, S. (Sedumedi). "Expatriate tax in Africa : the taxation of inbound Expatriate working in Botswana, Namibia, Nigeria and South Africa." Diss., University of Pretoria, 2013. http://hdl.handle.net/2263/41218.
Full textAbstract:
The growth in multinational corporations looking to expand and invest in foreign countries, particularly in the emerging markets such as Africa, has grown tremendously. “Africa is already the world’s second fastest growing economy after expanding 5% a year in the past two years, well above the global average.” (World Economic Forum, 2013). This has resulted in the movement of human capital between different tax jurisdictions and an increase in expatriates all across the world.
The focus of the study is to expand on the current knowledge on the taxation of inbound expatriates working within South Africa, Botswana, Namibia and Nigeria, as the world has turned its focus on Africa in terms of investment and expansion, as supported by Shelley (2004:3), and to provide both employers and employees with knowledge of the different tax regimes (source-based taxation and residence-based taxation) found in some of the emerging and fastest growing markets in Africa: namely Botswana, Namibia, Nigeria and South Africa.
It was found that the African tax landscape provides for a vast range of tax systems, of which, most are either residence–based or source-based. The tax systems of South Africa and Nigeria are similar in that they are residence-based. In each of these two countries, tax residents are taxed on their worldwide income, while non-residents are only taxed on income from specific sources. Therefore, residency is an essential concept in each of these tax systems. The above-mentioned countries, however, apply different methods and factors in determining the concept of residency.
As a result of the difference in determining tax residency and differences in their domestic income tax legislations, the taxability of income earned abroad differs in these countries.
The tax systems of Botswana and Namibia are similar in that they are source-based. In each of these countries, income is taxable when it is from a source or deemed source within these countries. Although in exceptional circumstances, some income which is not from a source within these countries may be taxable, relief is applied in terms of the domestic legislation, in order to lessen the burden of tax. Source is therefore a vital concept in each of these tax systems. The definition and application of the term source is different in both countries. However, similarities are found in that the source is primarily where the services were physically rendered.
Both employers and employees should consider the basis of taxation (source basis and residence basis) that is applied by the prospective host country when making a decision regarding an assignment to a foreign country as this forms a major factor in how their income (both local and foreign) will be treated.Dissertation (MCom)--University of Pretoria, 2013.
Taxation
unrestricted
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Holm, Darryn. "Funding higher education and training in South Africa: a comparative study of tax incentive measures, in conjunction with a dedicated tax." Thesis, Rhodes University, 2018. http://hdl.handle.net/10962/59445.
Full textAbstract:
Higher education and training in South Africa in the post-Apartheid era has never been more volatile than it is currently, some two decades into democracy. Despite the many advances and achievements of higher education, the student protests of 2015 and 2016 have given expression to underlying fault-lines, including increasing student expectations and frustrations with regard to access and funding. This research was undertaken to document the underlying historical issues and models pertaining to funding within the higher education and training sector as well as the existing higher education and training taxation policies and incentives enacted in South Africa and selected international jurisdictions. This was done with a view to providing a framework for higher education and training tax policy formation in South Africa to assist in meeting its higher education and training “access and affordability” targets as set out in the National Plan on Higher Education and the Higher Education White Paper, while at the same time not hindering economic growth. A doctrinal research methodology was adopted in this study as it mainly analysed and interpreted legislation and policy documents and therefore the approach was qualitative in nature. An extensive literature survey was done in order to document the various internationally selected legislated higher education and training tax policies and incentives. The literature indicated that there are widespread funding perspectives and initiates, and that international tax policies enacted with the aim of ensuring that higher education and training is more accessible and affordable to the public, is stable and effective in certain jurisdictions. It is submitted that while a higher education dedicated tax may not be sufficiently effective in South Africa, a combination of broad-based tax incentives will help to promote the change to a more affordable and stable higher education funding system, whilst not preventing growth through sustainable development.
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Stols, J. A. (Jeanne Anine). "Review of small business tax relief measures in South Africa." Diss., University of Pretoria, 2013. http://hdl.handle.net/2263/41575.
Full textAbstract:
Small businesses form an essential part of any country’s economy and these businesses are essential for growth and employment opportunities. It is however recognised that the success of small businesses are dependent on a few factors of which tax relief measures are one. The South African Government is supporting small businesses in our country through various initiatives and current small business tax relief measures form part of these initiatives.
This study focuses on only two such tax relief measures namely section 12E of the Income Tax Act for entities that qualify as a small business corporation and Turnover Tax for entities that qualify as micro businesses. These two tax relief measures aim to give small businesses reduced tax rates to assist them to grow and contribute towards job creation in South Africa. The unemployment rate in South Africa in the second quarter of 2013 was 25.6%. This is thus one indication that the tax relief measures per section 12E of the Income Tax Act and Turnover Tax are possibly not meeting the objectives of assisting small businesses to grow and alleviate unemployment.
This study focuses on researching the current small business tax relief measures in South Africa. The study thus commences with a literature review regarding the small business tax relief measures per section 12E of the Income Tax Act and Turnover Tax. It also includes detailed discussions regarding the criteria which should be met by small businesses to qualify for the tax relief per section 12E and Turnover Tax. The study then proceeds to obtain and analyse data through a questionnaire to accountants regarding their opinion of the current small business tax relief measures. Finally the study researches the objectives set out by SARS for section 12E of the Income Tax Act and Turnover Tax to determine whether these objectives have been met or not and to critically compare this to the responses from the accountants on the same subject.
As a result this study will assist the South African Government to determine areas for possible improvement in the current small business tax relief measures. Improvements in such tax relief measures could then contribute positively towards the economy of South Africa as a whole.
The small business tax relief measures were however limited to those already implemented in South Africa and further research could possibly be conducted regarding such tax relief measures in other developing countries similar to South Africa.Dissertation (MCom)--University of Pretoria, 2013.
lmchunu2014
Taxation
unrestricted
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Halbert, Andrea Sarah. "A detailed analysis of energy tax incentives in South Africa." Diss., University of Pretoria, 2016. http://hdl.handle.net/2263/60495.
Full textAbstract:
Coupled with the issue of promoting energy efficiency in South Africa is the need to focus on the source of energy production. The country's excessive burning of coal resources has been linked to the global warming crisis.
To address this energy crisis, taxpayers can be encouraged to play an important role in moving the country towards a position of energy stability by conserving energy or decreasing their energy consumption, or contributing towards the research and development of energy-efficient processes as well as cleaner forms of energy.
This study analyses the energy-related tax incentives that are currently legislated and available to South African taxpayers and discusses the feasibility of taking advantage of these incentives. The study may provide guidance to taxpayers that have decided to invest in renewable energy sources and will discuss some of the advantages and perceived challenges facing the renewable energy industry.
This study also provides a worked example that illustrates a detailed calculation of the energy tax saving incentive set out in section 12L of the Income Tax Act, No. 58 of 1962.
A case study guides taxpayers though the practical process of applying for and calculating their energy-saving tax deduction. The case study may be used as a point of reference for taxpayers planning to implement the section 12L energy efficiency tax incentive for the first time and may highlight complexities and concerns they should consider.Mini Dissertation (MCom)--University of Pretoria, 2016.
Taxation
MCom
Unrestricted
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Hughes, Rebekah. "A critical review of South Africa' future carbon tax regime." Master's thesis, University of Cape Town, 2017. http://hdl.handle.net/11427/25301.
Full textAbstract:
The world is currently facing a global climate crisis largely associated with growing
greenhouse gas emissions, of which carbon dioxide (CO₂) emissions are a significant
component. As the fourteenth largest emitter of CO₂ globally and the highest per
capita CO₂ emitter in Africa, South Africa has a responsibility to implement legal and
fiscal instruments to reduce its emissions. One instrument receiving growing global
attention to reduce CO₂ emissions is carbon tax; a tax imposed directly on the
emission of carbon or the use of products which generate carbon emissions. South
Africa is following the global trend and has for the past decade sought to formulate a
carbon tax regime which is effective in its operation, equitable in its impact across
different sectors, and which does not result in the collapse of the country's economy.
Whilst yet to be finalised, several policy documents have provided a clear indication
of its anticipated form, and 2015 saw the publication of the Draft Carbon Tax Bill with
the Bill being re-released in 2017, which by all accounts is due to be finalised for
implementation in mid-2017. The time would accordingly appear ripe to critically
review the country's anticipated carbon tax regime, and this forms the focus of this
dissertation. This critical review was undertaken against several tax design elements
identified by international commentators, namely: environmental effectiveness; tax
revenue; support for the tax; legislative aspects; technical and administrative viability;
competitiveness effects; distributional aspects and adjoining policy areas. The critical
analysis of South Africa's imminent carbon tax regime against generally accepted tax
elements has determined that it will be effective in its operation, equitable in its impact
across different sectors and it will promote a more sustainable and resilient domestic
economy.
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Hlengwa, Samukelisiwe. "Macro-economic determinants of property-tax revenue in South Africa." Master's thesis, Faculty of Commerce, 2021. http://hdl.handle.net/11427/32751.
Full textAbstract:
The South African local governments are facing enormous issues that challenge their financial independence and the fulfilment of their constitutional powers in providing service delivery to communities within their jurisdiction areas, amongst other things. Although the National government provides grants to the local governments, they are not sufficient to meet the basic needs of communities within sub-national provinces – given the rapid growth in population and the high levels of unemployment. Property tax is one of the sources of municipalities' revenues, over which the local governments have full autonomy. A vast number of scholars in literature emphasize the potential and the importance of property tax revenues within local government spheres, its contribution towards the improvement of community lives, and in providing the public infrastructures with the services they require – if they are fully utilised. This study examines the impact of macro-economic factors (gross domestic product, inflation, the unemployment rate, and the population rate) on property-tax revenues in South African municipalities across the nine provinces, from the year 2005 to 2018. The panel-data model was estimated by using fixed and random effect-estimation techniques. The findings provide evidence to suggest that there is a negative and positive relationship between property tax revenues and macro-economic determinants, depending on each subcategory from which the total property-tax revenue is based. The main results of the study indicate that the variation in economic activities does not improve property-tax revenue mobilization across South African local governments. Inflation was found to have a discouraging impact on the property-tax revenues derived by municipalities. Although the population rate reflected a stable trend during the study period, the results indicated that it has had a negative impact on property-tax revenues. Generally, the unemployment rate has depicted an unstable trend over the study period; and the findings show that it has had a negative effect on property-tax revenues across South African municipalities. The study suggests some policy recommendations for achieving optimal property-tax revenues. In addition, the study has contributed to the body of knowledge; and it has provided an analysis of the various macro-economic determinants – by sing widely accepted indicators in an emerging market. This research also recommends further exploration of the impact of other macro-economic determinants on property-tax revenues, in any future research studies. These include macro-economic determinants, such as the interest rate and household income, amongst other issues, which are not part of this study.
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Bhikha, Vishal. "Corporate governance in South Africa : the role of institutional investors." Master's thesis, University of Cape Town, 2015. http://hdl.handle.net/11427/15476.
Full textAbstract:
Corporate governance has become the slogan of the global investment arena over the past decade. Corporate scandals and collapses with major loss to shareholders have noted a change in investors' attitude towards this topic. Corporate governance has not only become important for the survival of companies in the global economy, a set corporate governance framework too is required to merely attract capital for start-ups. This study focuses on the institutional investors in South Africa, and their attitudes towards current corporate governance standards in South Africa, and attitude to governance reform. The aims of this study: * To accentuate the significance, features and benefits of corporate governance in light of the empirical analysis; * To understand South African institutional investor environment better, and their monitoring and participating roles in corporate governance for investment in listed corporate entities; * Review the key criteria factored into investing, and how these are monitored on an on-going basis. Corporate governance criteria in specific was used; * Highlight the attitudes of South African institutional investors to corporate governance in South Africa, and their perception on corporate governance reform; * Review weakness in findings in light of the empirical study and analytical framework and summarise recommendations given the outlook for this sector. We introduce the topic of corporate governance and the concept of agency theory which highlights the reasons behind opportunistic behaviour which occurs at different levels within corporate organisations. We further discuss the change in attitudes of institutional investors on the back of corporate scandals, as well as the reasons and remedies of institutional activism. A background of South African institutional investors is also conducted, with a review of current legislation and corporate governance reform mechanisms applicable to South Africa. Following this is a broad literature review on the quantitative as well as qualitative information needs of institutional investors; this forms the basis for the structure of our questionnaires conducted. The last section draws on the critical findings and insights (including quotes from the interviews) on the role of institutional investors in South Africa, followed by the summary and limitations of this study.
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Surtees, Peter Geoffrey. "An historical perspective of income tax legislation in South Africa, 1910 to 1925." Thesis, Rhodes University, 1986. http://hdl.handle.net/10962/d1004578.
Full textAbstract:
From Introduction: This work considers the period from Union, 31 May 1910 until promulgation of the Income Tax Act No. 40 of 1925.(1) It will describe the means, both financial and otherwise, by which the fledgling Government of the Union of South Africa contrived to balance its budget, and will consider the various sources of revenue available up to 1914, when the Government of Gen. Louis Botha first decided that a tax on income was necessary in order to maintain the solvency of the new State. Similarly the political pressures which shaped the nature of the Income Tax Acts up to 1925 will be discussed, and the political principles (or expediencies, depending on the degree of cynicism of the reader) which led the parties in power from time to time to make the decisions they did regarding the provisions of the various Acts. The effect of external political situations such as the Great War of 1914 - 1918 will be examined, as will the consequences of the rebellion of 1914 and the strikes of 1913 and 1922. The legislation predictably spawned a considerable body of litigation as taxpayers hastened to find and exploit loopholes in it; the resultant Income Tax Cases, in the Income Tax Special Court, Supreme Court and Appeal Court, formed the embryo of a body of judicial precedent which today encompasses some two thousand case reports. A few of the cases decided in the period up to 1925 are still quoted today; for example, CIR v Lunnon 1924 AD 1 SATC 7. The relevant cases from the period will enjoy consideration, with descriptions of how their verdicts affected either subsequent income tax principles or later legislation. Also considered will be the inception during this period of the way in which income tax legislation largely develops: the legislature promulgates an Act, the taxpayers discover legitimate ways to reduce their tax burden and the Minister of Finance consequently causes the Act to be changed in order to protect the tax base. Thereupon the resolute taxpayers seek loopholes anew. The effect of economic conditions on income tax legislation will engage attention; several such conditions cast their shadows into the House of Assembly during that 15 year period, notably the post-war recession and the drought of 1919. The selection of this period is apposite for several reasons: it covers the period during which income tax legislation came into being; - it includes several notable political occurrences. thus making possible a consideration of their effect on income tax legislation; it includes a natural cataclysm. namely a major drought. which also had an effect on subsequent Income Tax Acts; - a sufficient number of income tax cases was heard during the period to afford a fair indication both of how the body of case law would develop and how it would perpetually interplay with the legislation; it clearly illustrates the differences between the two great political parties of the time, differences largely caused by the vested interests of each; the dominant South African Party, with its need to retain the support of the commercial and particularly the mining sectors, and the smaller but even then growing National Party with its face set firmly towards the rural constituencies and the embattled farmers; - the period culminates in the Income Tax Act of 1925, a significant change from its predecessors, and the second Income Tax Act of the Pact Government. The imposition of taxes by the respective provinces does not form part of this work, as the scope of the discussion is limited to the various Income Tax Acts, and their development has been overseen by the central government.
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Smit, Hendrik Jacobus Albertus. "An in-depth study of input tax apportionment methods for value-added tax in South Africa." Diss., University of Pretoria, 2009. http://hdl.handle.net/2263/23894.
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The general mindset of most vendors is that if they have a valid tax invoice, they can claim all their input VAT. They are, however, not aware of the requirements of section 17(1) of the Value-Added Tax Act. Section 17(1) explains that vendors cannot claim all their input tax if their expense relates to both taxable and non-taxable supplies and that, consequently, input tax need to be apportioned in some or other way. There are several methods of apportionment available to vendors of which the turnover-based method is the only approved method by the South African Revenue Service (SARS) for which no ruling is necessary. This study investigates the most common methods used by vendors, how these methods function and also under which circumstances these methods are recommended. The sectors that are influenced the most by this provision in the Value-Added Tax Act are banks, universities and municipalities. These sectors have large amounts of exempt supplies but also taxable supplies with expenses incurred that cannot be allocated specifically to a certain income. Therefore, a method of apportionment should be used to allocate the input VAT. Information was obtained through financial reports and questionnaires from 29 entities in South Africa. The information was used to calculate an average percentage of apportionment in each sector and also to establish which method of apportionment is the most commonly used method of apportionment in each sector. The conclusion was drawn that there might, under certain circumstances, be uncertainty on whether some income should be included or excluded in the apportionment calculation. Under these circumstances, it is recommended that a ruling should be obtained from SARS to avoid problems in the future. CopyrightDissertation (MCom)--University of Pretoria, 2010.
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Arendse, Jacqueline A. "An investigation into the introduction of a new wealth tax in South Africa." Thesis, Rhodes University, 2018. http://hdl.handle.net/10962/61379.
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In a world of economic uncertainty and manifold social problems, South Africa has its own unique challenges of low economic growth, persistent budget deficits that produce increasing government debt and the highest level of economic inequality in the world. The history of injustice and economic marginalisation and the failure of the economy to provide inclusive growth drives an urgent need to address economic inequality through tax policy, placing ever more focus on wealth taxes as a possible solution. There is a hope is that taxing the wealthy may provide the opportunity to redistribute desperately-needed resources to those denied the opportunity to build wealth and who are trapped in the cycle of poverty. Yet, as appealing as a new wealth tax may seem, the introduction of such a tax carries with it a range of risks, not all of which are known. Of great concern is the possible effect on the economy, which, in its vulnerable state, cannot afford any loss of capital and investment. Very little research has been done on wealth tax in the South African context and there is a dearth of literature focusing on the views and perceptions of the wealthy individuals themselves. This qualitative study investigates the merits and disadvantages of a new wealth tax and seeks to identify any unintended consequences that could result from the implementation of a new wealth tax in South Africa, drawing from historical and international experience and primary data obtained from interviews with individuals likely to be affected by such a tax. Having explored the literature and international experiences with wealth tax and having probed the thinking of wealthy individuals who would be the payers of a wealth tax, the study finds that a new wealth tax may contribute towards the progressivity of the tax system, but it is doubtful whether such a tax would provide a sustainable revenue stream that would be sufficient to address economic inequality and there is a risk of causing harm to the economy. Recognising that the motivation for wealth taxes is often driven more by political argument and public perception than by rational quantitative analysis, the study also anticipates the introduction of a new wealth tax and suggests guidelines for the design of such a tax within the framework for evaluating a good tax system. This study informs the debate on wealth taxes in South Africa and contributes to the design of such a tax, should it be implemented.
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Haffejee, Yaasir. "A critical analysis of South Africa's general anti avoidance provisions in income tax legislation." Thesis, Nelson Mandela Metropolitan University, 2009. http://hdl.handle.net/10948/1243.
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This treatise was undertaken to critically analyse the new general anti avoidance rules (new GAAR) as set out in sections 80A to 80L of the Income Tax Act1. A discussion on the difference between tax evasion and tax avoidance was performed in the first chapter. The goals of this treatise were then set out. An analysis of the requirements for the application of the new GAAR was performed in the second chapter. The courts have historically reviewed the circumstances surrounding an arrangement when determining whether tax avoidance has occurred. The new GAAR requires the individual steps of an arrangement to be reviewed in isolation. Secondly, the courts have historically held that the purpose test, when determining the taxpayer‘s purpose, was subjective. The wording of the new GAAR indicates that this test is now objective. Thirdly, the courts have historically viewed the abnormality of an arrangement based of the surrounding circumstances. The wording of the new GAAR requires an objective view of the arrangement. An analysis of the secondary provisions contained in sections 80I, 80B and 80J of the new GAAR was performed in the third chapter. With regards to section 80B, it was submitted that the Commissioner should issue an Interpretation Note detailing all the methods ―he deems appropriate.
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Grobler, Daniel Jacques. "The "realisation company" concept in South African income tax law." Thesis, Nelson Mandela Metropolitan University, 2012. http://hdl.handle.net/10948/2118.
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The Supreme Court of Appeal has revisited the issue that has attracted the most litigation in South African tax law: whether gains from the disposal of an asset are of a capital or of a revenue nature. In CSARS V Founders Hill (509/10) [2011] ZASCA 66, 73 SATC 183 the court held that „intention‟ is not conclusive in the enquiry and cannot be the litmus test in determining the nature of proceeds from the sale of an asset. This judgement relegates intention to only one of the factors to be considered as it was held that it should be considered objectively whether the taxpayer is actually trading or not. The court also indicated that a „realisation company‟ would only act on capital account if it is formed for the purpose of facilitating the realisation of property which could not otherwise be dealt with satisfactorily. This treatise was primarily aimed at an analysis of the court cases which dealt with the „realisation company‟ concept in South African income tax law. In analysing the „realisation company‟ concept through case law culminating in Founders Hill, it was found that in every instance where „realisation company‟ x had won the argument, there had been compelling reasons why the owners of the assets had found it necessary to realise the asset through an interposed company established for that purpose. These reasons include: to facilitate the sale of property previously held by different people and to consolidate and conveniently administer the interests of beneficiaries under different wills. Furthermore, this treatise criticised „intention‟ as the primary test in determining the nature of proceeds from the sale of a capital asset and examined the objective approach to the inquiry as advocated in CSARS v Founders Hill. A discussion on the advantages of this approach indicated that it will certainly obviate a number of difficulties that arise from invoking „intention‟ as the litmus test.
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Gumbo, Wadzanai Charisma. "The taxation of the “sharing economy” in South Africa." Thesis, Rhodes University, 2019. http://hdl.handle.net/10962/64045.
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The research examined whether the services provided by the “sharing economy” platforms are adequately dealt with by the current South African tax systems. In addressing this main goal, the research analysed how the South African tax systems deal with the income and expenses of Uber, Airbnb and their respective service providers. The research also investigated how South Africa could classify “sharing economy” workers and how this would affect the deductibility of the worker’s expenses. A brief analysis was made of the taxation of the “sharing economy” businesses in Australia and the United States of America. These countries have implemented measures to effectively deal with regulating the “sharing economy” businesses. An interpretative research approach was used to provide clarity on the matter. Documentary data used for the research consists of tax legislation, case law, textbooks, commentaries, journal articles and theses. The research concluded that the current taxation systems have loopholes that are allowing participants in the “sharing economy” to avoid paying tax in South Africa. The thesis recommends that the legislature could adopt certain measures applied in Australia and the United States of America to more effectively regulate “sharing economy” in South African and remedy the leakages the current tax systems suffer, causing SARS to lose potential revenue.
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Mvovo, Sinesipho. "The impact of institutional investors on dividend policy in South Africa." Master's thesis, Faculty of Commerce, 2021. http://hdl.handle.net/11427/32872.
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Agency theory suggests that with enhanced monitoring, companies are more likely to pay out their free cash flow. Institutional investors may be great monitors given that they are professional investors with specialized expertise in evaluating firm's financial performance, management quality and governance. This study investigates the impact of institutional investors on dividend policy in South Africa, during the period from 2009 to 2018. Examining the effect of institutions as a whole can obscure the important variation in the subset of institutions, as they are not homogeneously incentivised to monitor firms. As a result, this paper segregates institutional investors into subcategories based on their monitoring abilities. Through the employment of a panel data regression model, this study finds a positive but statistically insignificant relation between institutional ownership and the dividend pay-out ratio; the positive relation is stronger in monitoring institutions. This paper used firm-fixed effect models to control for the possible endogeneity coming from unobserved firm-level, time invariant factors that determine both dividend policy and institutional ownership at the same time. The results of this paper do not support models that predict that institutional investors cause an increase in firm dividend pay-out ratio. Even though it is possible that firms pay dividends to reduce agency conflicts, this study did not find evidence that supports that the portion of shares held by institutional investors are related to the dividend pay-out policy. Secondly, although it is likely that institutions are more competent in monitoring management actions than individuals, there is no evidence to support that they use dividends as their monitoring device. The results of this study therefore caution those that invest in companies in South Africa and expect to receive more dividends by merely confirming the presence of institutional investors in their potential investee company.
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Smith, William Nevel. "A critical examination of the income tax provisions relating to the taxation of foreign income of residents as defined." Thesis, Nelson Mandela Metropolitan University, 2004. http://hdl.handle.net/10948/d1019676.
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The Budget speech of 23 February 2000 by the Minister of Finance marked the introduction of significant changes to the income tax system of the Republic of South Africa (Republic). A residence-based system of taxation (RBT) was adopted for years of assessment commencing on or after 1 January 2001 and Capital Gains Tax (CGT) was introduced with effect from 1 October 2001. According to the 2000 Budget Review a move to a residence-based system would significantly broaden the tax base, limit opportunities for tax arbitrage and bring the tax system in line with generally accepted international practice. The relaxation of exchange controls for South African residents with effect from 1 July 1997 made it possible for residents to invest limited funds offshore. The Fifth Interim Report of the Katz Commission suggested that if exchange controls were relaxed, the taxation of active income should remain on a source basis, but that passive income should be taxed on a residence basis. As a result deemed source rules in the form of section 9C and 9D were introduced into the Act with effect from 1 July 1997 and applied to “investment income” as defined. Section 9C taxed investment income of both residents and non-residents (from activities carried on by a permanent establishment in the Republic). Section 9D taxed investment income of controlled foreign entities and investment income arising from donations, settlements or other dispositions in the hands of residents. The taxation of foreign dividends with effect from 23 February 2000 as a first phase in the move to a residence based system, lead to the introduction of s 9E. Foreign Dividends were taxed in the hands of residents subject to certain exemptions. The basic interest exemption was extended to foreign dividends. Section 6quat was revised to extend the rebate to foreign dividends and profits of a company from which dividends were declared. Section 9D was amended to cater for foreign dividends received by or accrued to controlled foreign entities. The implementation of a full residence-based system of taxation with effect from years of assessment commencing on or after 1 January 2001 required amendments to various sections of the Income Tax Act as well as the introduction of new sections. A residence minus system was adopted which means that residents as defined are now taxed on their world- wide income with certain exemptions. Non-residents are taxed on their income from sources within or deemed to be within the Republic. The provisions relating to the taxation of foreign income of residents is complex; adding to the complexity is the fact that several changes have already been made to these provisions since the inception of the world-wide basis of taxation. The provisions must also be interpreted against the background of any double taxation agreement (DTA) between the Republic and the relevant foreign country as the applicable DTA may override the Republic domestic legislation. For purposes of this treatise the amending Acts enacted up to the end of December 2003 are taken into account. Hardly five years after the Katz commission of inquiry into the tax structure concluded that RBT and CGT were too complicated to be administered by SARS, the implementation of RBT and CGT were announced in the 2000 Budget. A detailed examination of the provisions relating to foreign income of residents as defined was undertaken. Interpretational issues to be clarified by legislation and certain planning issues are highlighted. It is essential to understand and carefully consider the Republic tax laws and the relevant double taxation agreements, for the successful application of the provisions. Careful planning before concluding transactions is of vital importance in order to avoid or minimize any unwanted tax consequences resulting from the RBT and CGT provisions.
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Madgwick, Clinton Dean. "The viability of the introduction of Spahn tax in South Africa." Diss., University of Pretoria, 2012. http://hdl.handle.net/2263/29016.
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With respect to foreign currency exchange markets, most governments would favour a stable exchange rate over a volatile exchange rate. This is also true for South Africa where volatile movements in the South African Rand pose challenges to industries, businesses and Government alike. There are a multitude of factors that affect the volatility of the South African Rand. These factors are difficult to identify, manage individually and measure. There are several tools that are available to manipulate and control foreign exchange rates in an attempt to reduce volatility; one such tool is the currency transaction tax. Spahn tax is one such form of currency transaction tax. The precursor to Spahn tax is Tobin tax. As a result of many criticisms levelled against Tobin tax, Spahn expanded on this original idea and made a few modifications to address some of the concerns. Spahn focused on creating a two-tier tax base where transactions falling within a normal and reasonable trading range would be taxed at a nominal amount and transactions that fall outside of the band would be taxed at a higher punitive rate. The trading band, or range, would be adjustable though market dynamics on a daily basis using a moving average. No country has implemented Spahn tax yet. The implementation of such a tax would have strong revenue-generating potential. A modification of such a tax with only a punitive rate and a wide trading band could be considered for South Africa. However, in being prudent South Africa does not appear to be in a position to be the first country to implement Spahn tax. There are too many market risks associated with the introduction Spahn tax that cannot be ignored.Dissertation (MCom)--University of Pretoria, 2012.
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Woodbridge, Taryn. "The regulation of tax practitioners in South Africa: a proposed model." Thesis, Rhodes University, 2006. http://hdl.handle.net/10962/d1003128.
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Tax practitioners in South Africa have been operating in an unregulated tax industry. This has allowed certain tax practitioners to fail in their duties to their clients, as many do not have to abide by any code of conduct or ethical principles, to the detriment of the public. Other than the provisions in the Income Tax Act, 58 of 1962, there has been no regulation. As a result of losses suffered by taxpayers either through the incompetence, ignorance or negligence of a tax practitioner, as substantiated by case law, and increased costs borne by the South African Revenue Services due to unnecessary queries and tax disputes, the Minister of Finance, Trevor Manuel, introduced the concept of tax industry regulation in his Budget Speech in 2002. This resulted in the introduction of section 67 A into the Income Tax Act, providing for a registration process for tax practitioners. All practising tax practitioners were required to register with the Commissioner for the South African Revenue Services by 30 June 2005. In addition, a discussion paper was issued in 2002 setting out the proposal of the Revenue Services to regulate the tax industry through the formation of an Association of Tax Practitioners. This proposal includes various contentious issues and casts significant doubt on whether the proposed model is the most suitable. The goal of the research was therefore to evaluate the current status of tax advisory services in order to demonstrate the need for regulation and to compare the proposed SARS model with two established regulatory authorities: the Estate Agency Affairs Board and the Australian Tax Agents Board. A conceptual model for regulation was developed in order to test all the models against a simple regulatory framework to determine whether each was aligned to certain best practices proposed in this framework. The research methodology was qualitative in nature, involving the critical interpretation of documentary data and data generated during a public discussion forum of tax practitioners. It was concluded that the SARS proposal is too prescriptive and, at the same time, too broad in its scope. In order to address the key objective, identified as protection of the taxpaying public, a simplified regulation procedure was recommended, which would adhere to the proposed regulatory framework.KMBT_363
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Kumm-Schmidt, Megan. "The illegal diamond trade in South Africa and its tax consequences." Thesis, Rhodes University, 2017. http://hdl.handle.net/10962/4389.
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The object of the research was to discuss the taxability of the illegal diamond trade in South Africa and to identify the consequences of not declaring income obtained from the illegal diamond trade to the South African Revenue Services. The research was conducted by means of a critical analysis of documentary data with specific reference to the Income Tax Act, the Value-Added Tax (VAT) Act, the Tax Administration Act and relevant case law. The Income Tax Act and the Value-Added Tax Act were referred to in relation to the tax consequences of the illegal diamond trade and the Tax Administration Act was used to determine the consequences of not declaring income to the South African Revenue Services. It was established that amounts received from the sale of illegal diamonds are to be included in the taxpayer's gross income, whilst in relation to income received from diamond theft it was not as clear. The MP Finance Group case held that the nature of the receipt and the way in which the transaction occurred in each individual situation will be the deciding factor as to whether or not the stolen diamonds will be taxable in the hands of the thief. The buying and selling of "blood" or stolen diamonds can amount to a trade. As there have been no definitive case decisions in South Africa, it remains unclear whether expenses relating to an illegal trade are deductible. Assuming that expenses relating to an illegal trade are deductible, the provisions of section 11(a) will apply to expenses incurred as a result of dealing in illegal diamonds and it was concluded that qualifying expenses will be deductible. A taxpayer buying and selling "blood" or stolen diamonds is required to register for VAT if sales exceed the threshold and would be required to account for VAT on these transactions. If the taxpayer does not declare the income for income tax purposes or register for and pay VAT to the South African Revenue Services from either the sale of illegal diamonds or the theft of diamonds, this will amount to tax evasion and the dealer will be subject to penalties and even imprisonment
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Van, der Merwe de Vos Wouter. "Taxation of non-residents in South Africa with specific reference to withholding taxes." Thesis, Nelson Mandela Metropolitan University, 2017. http://hdl.handle.net/10948/21296.
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This treatise tests the effectiveness of withholding taxes imposed by the South African tax authorities with respect to amounts paid from a South African source to a non-resident in respect of interest, royalties and foreign entertainers and sportspersons. The first research objective discusses the alignment of the meaning of words and phrases in both the domestic law of South Africa and Double Tax Agreements (DTA.) The second issue outlines whether the DTA supports the domestic law through the waiving of tax claims in favour of the country of source. In last instance the attribution of income is discussed. The interpretation attached to the words for the purpose of levying normal tax, serves as the methodology for identifying inconsistencies with the levying of withholding tax. The wider scope of withholding taxes with respect to the meaning of ‘interest’, ‘royalties’ as well as ‘foreign entertainer and sportsperson’ misaligns with the corresponding meaning of it in the DTA. This creates the risk that amounts paid to non-residents will either not be subjected to withholding tax in the source state or that the income will be taxable in the resident state as a result of the application of other articles of the DTA. DTA’s concluded between South Africa and other countries are based on the OECD Model Tax Convention. These DTA’s tend to favour the residence state with respect to the waiving of tax claims. The source state’s right to collect withholding tax on income from royalties and interest is prevented if the foreign person is physically present in South Africa for more than 183 days and if the interest/royalty payment is effectively connected with a permanent establishment in South Africa. The domestic law and DTA are misaligned with respect to the attribution of interest and royalty income since the recipient of the income for the purpose of the domestic law is not necessarily the beneficial owner of the debt claim or intellectual property. It can therefore be recommended that South Africa must renegotiate DTA’s to favour taxation in the source state. Withholding tax provisions must also be redrafted to align them with the DTA meaning.
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Ward, Grant. "Investing into africa: comparison between South African headquarter company and Mauritian GBC1 regime." Thesis, University of Cape Town, 2014. http://hdl.handle.net/11427/9153.
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Includes bibliographical references.In the 2010 Budget review The South African National Treasury announced it intended to create a business environment that would promote South Africa as a gateway to investment into Africa.1 As such a headquarter company regime would be considered. With globalisation and free movement of capital internationally countries are pursuing holding company regimes to attract investment to, and through, their shores. At the forefront are countries such as Belgium, Denmark, Luxemburg, Mauritius, the Netherlands, Singapore and the United Kingdom.2 Following the 2010 Budget review South Africa has now joined this group.
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Malevu, Shimane Mbuyiseni. "The possible introduction of advance pricing agreements in South Africa income tax legislation." Thesis, Nelson Mandela Metropolitan University, 2011. http://hdl.handle.net/10948/1333.
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This treatise analyses the suitability of the Advance Pricing Agreements (APA) for the South African Transfer Pricing legislation. The transfer pricing legislation places emphasis on the arm's length principle. Determining an arm's length price is problematic and as a result some countries have resorted to APA's to establish an arm's length price up-front, and thus avoid reviews and subsequent audits. The treatise first focuses on the transfer pricing provisions and other relevant applicable sections of the Act from the South African point of view, and it then examines the current status quo, i.e. the review processes used by the South African Revenue Services (SARS) as detailed in the Organisation of Economic Co-operation and Developments (OECD) Guidelines and the SARS Practice Note. Since negotiated tax treaties form part of the South Africa law, the impact of these treaties are discussed in Chapter 4. The treatise discusses in detail an APA from the OECD's point of view. It examines the objectives of an APA; the benefit and the shortcomings of using an APA. It then examines the APA request processes from a Canadian perspective and the administration of the APA from an USA perspective. The treatise examines South African trading partners using APA in transfer pricing matters, with reference to the effects and the challenges such countries face. The treatise concludes by looking at the benefits provided by use of an APA by South African major trading partners. The effect and the use of such APA will have in South Africa is also discussed and how it should be modelled; the present status quo with regard to personnel at SARS; and the possible impact the introduction and implementation will have in South Africa.
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Loyson, Richard Michael. "A critical analysis of the income tax implications of persons ceasing to be a resident of South Africa." Thesis, Nelson Mandela Metropolitan University, 2010. http://hdl.handle.net/10948/1180.
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Over the last 10 years the South African fiscus has introduced numerous changes to the Income Tax Act (ITA) which affect the income tax implications of persons ceasing to be a resident of South Africa. The two main changes were: - The introduction of a world-wide basis of taxation for residents - The introduction of capital gains tax (CGT) as part of the ITA The aim of this treatise was to identify the income tax implications of persons ceasing to be a resident of South Africa. Resulting from this research, several issues in the ITA have been identified, and the two major ones are summarised below. Firstly, upon the emigration of the taxpayer, there is a deemed disposal of a taxpayer’s assets in terms of paragraph 12 of the Eighth Schedule. It is submitted that the resulting exit tax may be unconstitutional for individuals. It is recommended that South Africa should adopt the deferral method within its domestic legislation for individuals who are emigrating. The deferral method postpones the liability until the disposal of the asset. Secondly, on the subsequent disposal of assets by former residents where there was no exit charge in terms of the exemption under paragraph 12(2)(a)(i) of the Eighth Schedule. Depending on the specific double tax agreement (DTA) that has been entered into with the foreign country, taxpayers have been given vii the opportunity to minimise or eliminate the tax liability with regard to certain assets. This should be of concern from the point of view of the South African government. Further issues noted in this treatise were the following: - It is submitted that the term ‘place of effective management’ has been incorrectly interpreted by SARS in Interpretation Note 6. - It is further submitted that the interpretation by SARS of paragraph 2(2) of the Eighth Schedule is technically incorrect. The above issues that have been identified present opportunities to emigrants to take advantage of the current tax legislation. It is further recommended that taxpayers who are emigrating need to consider the South African domestic tax law implications, respective DTA’s, as well as the domestic tax laws of the other jurisdiction, not only on the date of emigration but also on the subsequent disposal of the respective assets.
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Mili, Simphiwe. "An investigative discussion on the feasibility of an annual wealth tax in South Africa: are South African taxpayers ready for a wealth tax?" Master's thesis, Faculty of Commerce, 2020. http://hdl.handle.net/11427/32802.
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In 2018 the Davis Tax Committee was tasked with the responsibility of investigating the feasibility of introducing an annual wealth tax in South Africa. This wealth tax would serve as a replacement for the existing wealth taxes that are Estate Duty, Donations Tax, Security Transfer Tax and Transfer Duty. There has since been great debate around this topic and the aim of this dissertation is to collate all the literature that has been researched on the wealth tax both nationally and internationally to conclude as to whether or not a wealth tax will be suitable for South Africa currently The two main reasons behind the proposal of a wealth tax are firstly, to increase tax contributions to the South African revenue. Secondly, it is as a measure of redress given that South Africa has great disparities in wealth with the wealth Gini coefficient currently reported to be 0.9. The wealth tax has not only been a contentious topic in South Africa, but has been debated globally. The OECD reported that initially 12 countries had implemented an annual wealth tax and now only 4 still have the tax operating in their economies. This dissertation focuses on lessons that can be learnt from international countries by conducting a country review on France, Germany and India. India is the only other BRICS country that had previously implemented the annual wealth tax and has since abolished it in 2015. Furthermore, it is important for the introduction of any tax in an economy to align with the principles of a good tax system. Adam Smith set out the canons of a good tax system such as simplicity, efficiency and equity and this dissertation assesses whether the wealth tax aligns with these ideals and investigates whether it would be fair to implement this tax as per the principles of vertical and horizontal equity. As mentioned above, South Africa already has existing wealth taxes. This study therefore interrogates whether the annual wealth tax is necessary since there are already wealth taxes that exist and whether these existing taxes on wealth meet the intended ideals of the wealth tax. There are advantages and disadvantages associated with the implementation of this tax. It was therefore important for this dissertation to juxtapose these. The dissertation concludes that the disadvantages outweigh the advantages of implementing a wealth tax in South Africa at the moment. The introduction of a wealth tax would therefore not be feasible in South Africa at the moment.
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Papp, L. (Linda). "The feasibility of the introduction of additional wealth taxes in South Africa : an African perspective." Diss., University of Pretoria, 2012. http://hdl.handle.net/2263/41536.
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From all over the globe the inequality between the rich and the poor is a topic that is debated politically and socially. Wealth tax is often mentioned as an easy solution to reduce this inequality effectively. Even in South Africa cries for a wealth tax have been heard following Archbishop Emeritus Desmond Tutu’s comments that such a tax can help reduce the effect of past injustices.
The imposition of a wealth tax has various advantages and disadvantages that are strongly debated by the proponents and opponents of the tax. The impact of these advantages and disadvantages has however not been measured and quantified up to date. Although the disadvantages seem to outweigh the advantages, it seems that there is some scope for a wealth tax to be politically motivated.
The dawning of the modern era has however changed the landscape for tax policies. Global mobility has resulted in individuals being able to choose where they work, live and invest. Taxes have been proved to be a factor that influences these decisions of individuals on where to live and invest.
It is therefore becoming increasingly important to have tax policies that are competitive in comparison to peer countries. This study focused on determining how competitive South Africa’s tax policies are, relating to wealthy individuals, compared to the equivalent taxes in other African countries with similar sized economies. The study consists of qualitative, non-empirical research performed in the form of a literature review.
The study’s finding is that South Africa has more types of taxes imposed on wealthy individuals than any other of the sampled countries. In addition, the taxes imposed are more often than not substantially higher than the equivalent charged by its peers. This could have a detrimental effect when investors start to realise that they could optimise the resources available to them by choosing not to work and live in South Africa, but would rather select one of its neighbouring countries. Not only will potential new investors be discouraged from investing, but the question also arises at which point South African residents will start to seek their fortune elsewhere. Based on these findings, it seems that there is no scope for imposing yet another wealth tax in South Africa at present.Dissertation (MCom)--University of Pretoria, 2012.
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de, Wet Mary-Ann. "Seeking deviations from South Africaﾒs tax treaty policy with respect to treaties in Africa: evidence from the treaty practice." Master's thesis, Faculty of Commerce, 2019. http://hdl.handle.net/11427/31168.
Full textAbstract:
Since South Africa was welcomed back into the international arena in 1994, there has been a significant increase in the number of tax treaties concluded between South Africa and other Sub-Saharan Africa countries, as part of South Africa’s goal to expand into Sub-Saharan Africa (SSA). The purpose of this dissertation is to determine whether these treaties concluded between South Africa and SSA countries have been influenced by South Africa’s stated tax treaty policy, or have been guided by regional practices or to confirm whether South Africa’s tax treaty practices have influenced any regional models. This dissertation includes a detailed analysis of 18 tax treaties concluded between South Africa and other SSA countries. This analysis is used to identify any significant deviations in these treaties as compared to the OECD Model and the UN Model. The SSA region has several economic organisations that have developed tax models to cater for treaty negotiations of developing countries. These models include the African Tax Administration Forum (ATAF) Model, the Southern Africa Development Community (SADC) Model and the East African Community (EAC) tax agreement. The study observes that South Africa’s tax treaty practise generally follows the OECD Model, but also incorporates certain provisions of the UN Model. The analysis of the 18 treaties as compared to the OECD Model identified 31 significant deviations to the OECD Model, and of these deviations, 22 (71%) align to the provisions of the UN Model. These significant deviations were analysed to determine if they arose from South Africa’s stated positions on the OECD Model, influenced by South Africa’s domestic laws, or arose at the insistence of the other Contracting State, or from other factors. v The findings suggest that of the 31 deviations, the majority (80%) arise out of South Africa’s positions on the OECD Model and from its domestic laws. Further analysis was conducted to determine if these significant deviations were contained in the SSA regional tax models. The findings indicate that the SADC Model has the highest correlation as it includes 87% of these deviations, followed by ATAF (77%) and EAC (71%). An additional analysis, by country per regional body, was conducted on the deviations arising from South Africa’s treaty practices. This analysis indicates that 80% of South Africa’s treaty practices occur in the ATAF Model, 84% in the SADC Model, and 72% in the EAC Model. This analysis found that, on average, 82% of treaties concluded with ATAF member countries, 81% of SADC member countries and 89% of EAC member countries aligned to South Africa’s treaty practices. The high correlation to the SADC and ATAF Models indicates that South Africa’s tax treaty practices have influenced the development of these regional models, and the high correlation between the treaties for each country and region, suggests that the majority of the treaties have been significantly influenced by South Africa’s tax treaty practices. Thus, the conclusion is that the majority of the significant deviations found in South African treaties concluded with Sub-Saharan African countries arise from the South African tax treaty practices which are generally based on the OECD model, with the inclusion of certain provisions of the UN Model. These deviations align with South Africa’s position to the OECD Model and its domestic laws, which form the South African treaty practices. It is concluded that these treaty practices have significantly guided the SSA treaties and suggests that these treaty practices have influenced the Sub-Saharan African ATAF and SADC Models.
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Kula, Xoliswa Beverley. "An analysis of interest deductions and other financial payments in terms of South African income tax legislation." Thesis, Nelson Mandela Metropolitan University, 2015. http://hdl.handle.net/10948/8188.
Full textAbstract:
Tax avoidance through interest deductions has been highlighted internationally as a concern with the effect of eroding tax revenues of countries, including South Africa (SA). The evident cause of this concern is what is termed base erosion and profit shifting (BEPS) mainly orchestrated by multinational companies using aggressive tax planning schemes. Although the concern continues to exist, comprehensive measures are in place in SA such as the anti-avoidance rules and exchange control regulations to mitigate the concern. The study was undertaken to analyse the legislation on interest deductions in terms of the Income Tax Act No 58 of 1962 (‘the Act’) with particular focus on anti-avoidance. A number of issues pertaining to the operation of the provisions in the Act; administrative challenges as well the possible exploitation of loopholes within the provisions were identified. Furthermore, a comparative analysis conducted against Australia and the United Kingdom indicated that the measures adopted in SA are relatively similar, if not ahead. The effect the anti-avoidance measures have on the economic growth was considered. The results were positive in that the measures do not counteract the pursuit of economic growth. Lastly, the study assessed the position of SA against the internationally recommended best practice on the subject matter and it became evident that opportunities exist to improve the current measures applied in SA to mitigate the BEPS risks through interest deductions.
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Kabwe, Ruddy Kapasula. "Consumption tax collection models in online trade in digital goods." Diss., 2017. http://hdl.handle.net/10500/24950.
Full textAbstract:
Value-Added Tax (VAT) is an indirect tax levied on the supply of goods and services. Governments raise revenue by collecting VAT in order to facilitate the maintenance of basic services for the general population.
Challenges in VAT collection arise from the supply of digital goods to consumers by means of e-commerce transactions. Moreover, VAT collection mechanisms that do not adequately cater for the collection of VAT on the supply of digital goods results in under-taxation and VAT fraud.
The use of an intermediary is a more effective method of collecting VAT on e-commerce transactions since it shifts the compliance burden away from foreign online businesses.
VAT legislation should be amended to cater for the collection of VAT by intermediaries.Mercantile Law
LL. M. (Tax Law)
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Sekane, Teboho Henry. "The importance of knowledge sharing in increasing revenue collection in SARS." Thesis, 2014. http://hdl.handle.net/10210/12456.
Full textAbstract:
M.Com. (Business Management)The South African Revenue Service (SARS) is an organ of the state, which has a mandate of collecting revenue for the government. The organisation is faced with numerous challenges in its task of collecting revenue. The challenges include the current recession that the world economy is going through and the deliberate tax evasion by businesses and individuals. To execute its mandate effectively, the organisation has to look continuously at how it uses its internal resources and how it can effectively lower the costs of collecting revenue. This research study looks at the importance of knowledge sharing in support of revenue collection at SARS. SARS recently launched a compliance model, indicating a problem of non-compliance, which contributes to the high debt figures for the organisation, compared with some revenue authorities in Europe, North America, Australia and Africa. The focus of this research study was the two Johannesburg offices of the debt management department of SARS, Alberton and Sunninghill (Megawatt Park). A qualitative research design was chosen for this study to obtain an in-depth feel of the knowledge sharing in the organisation. Interviews were conducted with 19 respondents from the two offices and the findings are presented in table format, with a detailed illustration of the responses and quotes from the respondents. The research objectives were met and the research hypothesis was accepted. The study concludes with six recommendations and a suggestion for future research. The limitations of the study were that it was limited to the Johannesburg area and confined to the debt management department at SARS.