Thesis (M.Com. Taxation) -- University of Witwatersrand, Faculty of Commerce, School of Accountancy, 2014. / The taxation of dividends at shareholder level has been the norm in the majority of the international market. South Africa is a developing country that is constantly increasing its market share in the international stage and in order to be more competitive in the international market South Africa has to align itself with international norms and practices and this resulted, amongst other things, with the introduction of dividends tax in 2012. This study analysed the new dividends tax legislation that became effective on 1 April 2012 in South Africa, by way of a normative literature review, and briefly discusses how South Africa compares with Russia, India and China, three other developing countries. The literature review confirmed the benefits with regards to the dividends tax system; however, the review also confirmed that there are challenges within the dividends tax system. The benefits of the dividends tax system that were noted include amongst others; aligning South Africa with international tax norms, the increased tax base and the establishment of a familiar withholding tax system that can attract more foreign investment. The levying of dividends tax on beneficial owners results in an increased tax base because the number of taxpayers increases to companies and individuals, versus levying secondary tax on companies only on the companies paying the dividend. Some of the challenges of the dividends tax system are the administrative burden placed on companies and regulated intermediaries, the rate of 15% might be considered to be too high in comparison to other developing countries and the taxation of dividends in the hands of the individuals might be a disincentive to invest in equity shares. South African legislation on dividends tax differs from that of China; with the latter country taxing the dividends in the hands of the beneficial owners without a requirement on company‘s paying the dividend to withhold the dividends tax. The Russian legislation on taxation of dividends is similar to that of South Africa but taxes the dividend on the net amount. In India the dividend distribution tax is levied in the company making a dividend distribution.

Preparing for the implementation of any new tax is a mammoth task. This mammoth task was evident when the National Treasury, SARS, companies, professional bodies, industry bodies and advisory organisations alike were preparing for the introduction of the new dividend tax in South Africa. The preparations included extensive consultations, sharing of information and providing guidance in newsletters, journals, guidance notes, websites, blogs, magazines, news papers and the like. Companies, Regulated Intermediaries and shareholders do not only have to be informed of the legislative changes, they need to be informed about the when, what and how of the impact of the tax and about the preparation needed for the implementation of dividends tax. Several common themes were identified that are critical to the successful implementation of dividends tax. These themes include communication between the business community and the regulators, as well as communication within the organisations. Involvement in and by the industry bodies has also been identified as critical to the successful implementation of dividends tax, while the timely preparation and communication of the regulatory reporting requirements is essential to the process. Within organisations, centralised oversight enables the coordinated preparation and implementation of the new tax. AFRIKAANS : Die voorbereidings vir die implementasie van enige nuwe belasting is 'n reuse taak. Die omvang van hierdie taak het duidelik geword toe die Nasionale Tesourie, die Suid Afrikaanse Inkomstediens, maatskappye, professionele liggame, industrie-organisasies, ensomeer voorbereidings moes tref vir die implementasie van dividend belasting. Die voorbereidings het konsultasie met lede, die deel van inligting en die voorsiening van leiding in nuusbriewe, joernale, webtuistes, tydskrifte en koerante ingesluit. Maatskappye, gereguleerde tussengangers en aandeelhouers moes nie net ingelig word oor die veranderinge in die wetgewing nie, hulle moet ook ingelig word aangaande die wanneer, wat en hoe van die impak van die belasting en die voorbereidings vir die implementasie van dividend belasting. Verskeie gemeenskaplike temas wat krities is tot die suksesvolle implementering van dividend belasting is geidentifiseer. Hierdie faktore sluit in kommunikasie tussen die organisasies, die besigheids samelewing en die reguleerders, asook interne kommunikasie binne die organisasies. Betrokkenheid in en by die industrieorganisasies is ook geidentifiseer as krities tot die suksesvolle implementering van dividend belasting, terwyl die tydige voorbereiding en kommunikasie deur die reguleerders en die kommunikasie van die rapporterings vereistes van die reguleerders essensieel is tot die proses. Sentrale interne oorsig binne organisasies maak die gekoordineerde voorbereidings vir die implementasie van dividend belasting moontlik. / Dissertation (MCom)--University of Pretoria, 2012. / Taxation / unrestricted

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. / lmchunu2014 / Taxation / unrestricted