THE IMPOSED TAX BURDEN IN SOUTH AFRICA

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IMPOSTS ON PAYROLL AND WORKFORCE IN SOUTH AFRICA

Imposts on payroll and workforce in South Africa consist of a compulsory earmarked levy on the payroll of employers, referred to as the skills development levy (SDL). The skills development levy is regulated by the Skills Development Levies Act (9 of 1999), and is imposed at 1% on the assessed amount from employers’ payrolls (SARS, 2010b:10). The term ‘employer’, for the purposes of this levy, includes individual taxpayers who act as employers (SARS, 2010b:4).

IMPOSTS ON CAPITAL GAINS IN SOUTH AFRICA

The impost on capital gains in South Africa is labelled capital gains tax, but it is not an additional tax. It is a direct impost on the wealth79 of an individual80 as an integral part of the Income Tax Act (58 of 1962). The capital gain (or loss) is determined in terms of the Eighth Schedule to the Act and is included in the taxable income of an individual taxpayer in the year of assessment in terms of section 26A of the Act.

IMPOST ON VALUE-ADDED TRANSACTIONS IN SOUTH AFRICA

Imposts on value-added transactions in South Africa consist of an impost labelled value-added tax (VAT). This is the second largest source of government revenue from taxes in South Africa, as it currently contributes approximately 30% to the National Revenue Fund (National Treasury, 2011a:159). Value-added tax is imposed and collected at different stages by different enterprises, from the production stage to the supply of the final product. It is destination-based, which means that only the consumption of goods and services in South Africa is taxed (Steenekamp, 2012:258). Vendors81 are required to register and are burdened with the statutory obligation of collecting the tax on behalf of the government. The supply of most goods and services is taxed at a standard rate of tax. However, provision is made for some exempt supplies, where the supply of goods and services is not taxed, and for zerorated supplies, where the goods and services are taxed at a rate of 0% (SARS, 2010c:8; Steenekamp, 2012:265-266; Value-added Tax Act (89 of 1991)).

IMPOSTS ON TURNOVER IN SOUTH AFRICA

Imposts on turnover in South Africa consist of an impost referred to as turnover tax on micro businesses. This is an annual presumptive tax payable by registered micro businesses (SARS, 2011:2). A micro business is defined, in terms of Paragraphs 2 and 3 of the Sixth Schedule to the Income Tax Act (58 of 1962) , as a business with a qualifying turnover that does not exceed R1 million (currently) for a year of assessment, and which is not specifically disqualified (SARS, 2011:1). The impost is essentially a package that consists of a turnover tax as a substitute for income tax, capital gains tax (CGT) and secondary tax on companies82 (STC). Turnover tax is optional, meaning that a micro business can decide if it wants to use this impost option or use the usual current tax system. It is available to sole proprietors (individuals), partnerships, close corporations, co-operatives and companies (SARS, 2011:3).

IMPOSTS ON SPECIFIC SERVICES IN SOUTH AFRICA

Government revenue from imposts in this category in South Africa consists mainly of casino taxes and horse racing taxes (Gauteng, 2011:15; KwaZulu- Natal, 2011:47; National Treasury 2009a:11; Western Cape, 2011a:36). Casino and horse racing taxes in South Africa are levied at the provincial government sphere in terms of provincial legislation. These taxes consist of both licence fees83 and levies on the income of the entities providing these services (CASA, 2008:12-23; KwaZulu-Natal, 2010:2-7). These taxes are compulsory imposts and form part of the provincial government’s funds for general expenses to the benefit of the wider public in the province (Gauteng, 2011:15; KwaZulu-Natal, 2011:47; National Treasury 2009c:39; Western Cape, 2011a:36). Casino and horse racing taxes are mainly imposed on the corporate entities providing these services and not on individual taxpayers as such. Therefore it is assumed that these taxes are shifted onto individuals in the form of price, payroll or shareholder shifting, as explained in Section 2.2.6.2. These imposts were therefore not examined further in this study.

CHAPTER 1: INTRODUCTION 
1.1 BACKGROUND
1.2 RATIONALE FOR THE STUDY
1.3 RESEARCH OBJECTIVES
1.4 SCOPE AND LIMITATIONS OF THE STUDY
1.5 RESEARCH METHOD
1.6 STRUCTURE OF THE THESIS
CHAPTER 2: THE IMPOSED TAX BURDEN 
2.1 INTRODUCTION
2.2 THE IMPOSED TAX BURDEN AS A CONSTRUCT
2.3 CONCLUSION
CHAPTER 3: THE IMPOSED TAX BURDEN IN SOUTH AFRICA 
3.1 INTRODUCTION
3.2 HISTORICAL OVERVIEW OF TAXES IN SOUTH AFRICA
3.3 IMF FRAMEWORK FOR CLASSIFYING GOVERNMENT REVENUE
3.4 PUBLIC SECTOR STRUCTURE AND FUNDING IN SOUTH AFRICA
3.5 IMPOSTS ON INCOME AND PROFITS IN SOUTH AFRICA
3.6 IMPOSTS ON PAYROLL AND WORKFORCE IN SOUTH AFRICA
3.7 IMPOSTS ON CAPITAL GAINS IN SOUTH AFRICA
3.8 RECURRENT IMPOSTS ON IMMOVABLE PROPERTY IN SOUTH AFRICA
3.9 IMPOSTS ON ESTATES AND DONATIONS IN SOUTH AFRICA
3.10 IMPOSTS ON FINANCIAL AND CAPITAL TRANSACTIONS IN SOUTH AFRICA
3.11 IMPOST ON VALUE-ADDED TRANSACTIONS IN SOUTH AFRICA
3.12 IMPOSTS ON TURNOVER IN SOUTH AFRICA
3.13 EXCISES IMPOSED IN SOUTH AFRICA
3.14 IMPOSTS ON SPECIFIC SERVICES IN SOUTH AFRICA
3.15 IMPOSTS ON THE USE OF MOTOR VEHICLES IN SOUTH AFRICA
3.16 IMPOSTS ON THE USE OF GOODS AND ON THE PERMISSION TO USE GOODS, OR ON THE PERMISSION TO PERFORM SERVICES
3.17 OTHER IMPOSTS ON THE USE OF GOODS AND SERVICES IN SOUTH AFRICA
3.18 IMPOSTS ON INTERNATIONAL TRADE AND TRANSACTIONS
3.19 SOCIAL SECURITY CONTRIBUTIONS IN SOUTH AFRICA
3.20 GOVERNMENT TRANSFERS IN SOUTH AFRICA
3.21 REVENUE FROM PROPERTY
3.22 SALE OF PUBLIC GOODS AND SERVICES IN SOUTH AFRICA
3.23 ADMINISTRATIVE SERVICES
3.24 INCIDENTAL SALES BY NON-MARKET ESTABLISHMENTS
3.25 FINES, PENALTIES, AND FORFEITS
3.26 VOLUNTARY TRANSFERS AND MISCELLANEOUS INCOME
3.27 IMPOSED TAX BURDEN IN SOUTH AFRICA
3.28 CONCLUSION
CHAPTER 4: THE PERCEIVED TAX BURDEN 
4.1 INTRODUCTION
4.2 THE PERCEIVED TAX BURDEN AS A CONSTRUCT
4.3 THE PERCEIVED TAX BURDEN IN SOUTH AFRICA
4.4 CONCLUSION
CHAPTER 5: FORMULATING THE CONCEPTUAL FRAMEWORK 
5.1 INTRODUCTION
5.2 METHODOLOGY UNDERPINNING THE CONCEPTUAL FRAMEWORK
5.3 UNIT OF ANALYSIS
5.4 TIME FRAME
5.5 METHOD OF MEASUREMENT
5.6 COVERAGE
5.7 VALUATION
5.8 INTER-UNIT COMPARISON
5.9 CONCLUSION
CHAPTER 6: VALIDATING THE CONCEPTUAL FRAMEWORK 
6.1 INTRODUCTION
6.2 RESEARCH ORIENTATION
6.3 THE POPULATION
6.4 THE DATA AND ITS COLLECTION
6.5 FORMULATION OF A THEORY BY ANALYSING THE LITERATURE
6.6 DESIGN OF THE DATA COLLECTION INSTRUMENT AND PILOT INTERVIEW QUESTIONS
6.7 SELECTING CASES
6.8 CONDUCTING MULTIPLE CASE STUDIES
6.9 SUMMARY
CHAPTER 7: DATA ANALYSIS 
7.1 INTRODUCTION
7.2 ORIENTATION OF THE DATA ANALYSIS TECHNIQUE
7.3 MAIN THEME 1: DEMOGRAPHIC PROFILE
7.4 DATA RELATING TO THE IMPOSED RECURRENT TAX BURDEN
7.5 DATA RELATING TO THE PERCEIVED TAX BURDEN
7.6 MEASURING AND COMPARING THE TAX BURDEN
7.7 CONCLUSION
CHAPTER 8: CONCLUSION 
8.1 INTRODUCTION
8.2 SUMMARY OF FINDINGS AND CONCLUSIONS
8.3 SUMMARY OF THE CONTRIBUTIONS OF THE STUDY
8.4 LIMITATIONS OF THE PRESENT RESEARCH
8.5 FUTURE RESEARCH
8.6 CONCLUDING REMARKS
LIST OF REFERENCES

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