The study uses stress testing to determine the need, if any, for additional capital and/or provisioning for commercial banks in Botswana. The aim is to probe the use of supervisory stress testing as a mitigating factor to some concerns that have been raised with the Basel capital adequacy ratio (CAR) following the 2007-9 global financial crisis. During the crisis, some financial institutions failed or required some form of government assistance, amid having met the minimum CAR requirements prior to the crisis. This led to increased public scrutiny and a loss of confidence in financial regulation. As a result, some scholars have argued that the Basel capital framework is not sufficient as a measure of capital adequacy and as such advocate for the adoption of stress testing to overcome the shortcomings. Specific reference is often made to the success of the subsequent SCAP (US) and CEBS (EU) stress tests that are conceived to have helped restore public confidence as they revealed several oversight loopholes in the existing Basel methodology for the determination of adequate capital for financial institutions. In this regard, this paper considers the context of Botswana, where, even though banks withstood the financial crisis with a relatively strong stance, the economy remains concentrated with heavy dependence on the mining sector. This increases macroeconomic vulnerability and banking sector risks and hence intensifies the need to ensure that banks have sufficient capital holdings at all times. The study adopts an accounting-based approach to stress testing by applying shocks for credit, interest rate, foreign exchange and liquidity risks with the CAR as the main metric. A combined scenario stress test revealed that a collective change in provisions, NPLs, interest rate and exchange rate, that resulted in a decline in CAR from 19.4 to 18.6 post-shock. The available capital remains adequate even following assumed stress conditions. However, the stress test has revealed weaknesses in credit risk and foreign exchange risk as some banks’ capital adequacy fell below the 15 percent minimum. Furthermore, the scenario analysis showed the need for a P22 million capital injection into the banking system, should the tested scenarios occur. As far as can be reasonably established, this kind of study has not been published before for Botswana. As such, this paper lays groundwork for future studies particularly relating to the formulation of scenarios that can better reflect the risk profile of the Botswana banking system.

The purpose of this study is to investigate whether empirical evidence support traditional determinants and theories of capital structure in the listed South African property industry, a relatively new adopter of the globally recognised and regulated Real Estate Investment Trust (REIT) structure. There currently exists little academic literature focusing on this specific topic in the South African property sector. Furthermore, the recent change of the prevalent legal form of South African listed property companies, affords a unique opportunity to investigate the possible impact of regulatory changes on capital structure within this context. A panel regression is applied to a sample of 39 firms over the period 2005 to 2019, which includes all property companies with South African exposure listed on the JSE, both during the pre-REIT and REIT regimes. This results in an unbalanced panel of 314 company years. The regime change to the REIT structure appears to have, on average, increased the use of leverage in South Africa's listed property sector. Debt usage, however, remains well below the allowed regulatory limit and lower than worldwide counterparts. The regression results offer support for the trade-off theory, pecking order theory and market timing theory in the South African listed property context, and are generally in agreement with international findings. Thus, size is found to be positively correlated to debt levels, in line with trade-off theory prediction. Growth opportunities tend to increase leverage ratios, which is consistent with the pecking order theory. Evidence for market timing behavior is the positive correlation found between 12-month share price movements and leverage. Other firm specific determinants including share volatility and interest cover ratio also offered pecking order theory support. Inflation was also found to have a significant effect on leverage in the sector. In conclusion, it is found that the evidence supports elements of most capital structure theories in the South African listed property sector.

A recent South African judgment concerning the application of the most favoured nation clause in the South Africa/ Netherlands double tax convention has once again raised questions regarding the correct approach to the interpretation of treaties in South Africa and what information should be admissible as part of this process. In particular the court's strict approach to the admissibility of extrinsic evidence in the interpretation of double tax treaties and the application of the parol evidence rule requires further investigation. This dissertation considers this question by first analysing the approach to interpretation and the admission of extrinsic evidence as provided for under the Vienna Convention on the Law of Treaties. Thereafter, the South African domestic approach to interpretation and the principles regulating the admission of extrinsic evidence is considered. A particular focus is placed on the parol evidence rule as applied by South African courts. Following this analysis, the dissertation proceeds with a comparison of the two approaches in order to determine any commonalities and differences that might exist. Through this process of comparison, the dissertation finds that the contemporary South African approach to interpretation, is largely aligned with the approach in the Vienna convention, subject to certain limitations on evidence admissibility as provided for under the domestic parol evidence rule. The dissertation concludes that it would be appropriate for a South African court to apply the ordinary domestic principles of interpretation when interpreting tax treaties, provided that this process must still be informed by the principles of the Vienna Convention, other sources of customary international law and foreign case law on the interpretation of treaties. The interpretive process would nevertheless remain subject to the domestic principles of evidence admissibility and the parol evidence rule.

This dissertation endeavours to analyse the case Commissioner for the South African Revenue Service v Labat Africa Ltd and its consequences in order to conclude whether the tax law created by the court is sound. Specifically it looks at the progression of the case through the different courts, as well as the other court cases referred to in the different courts. The research found that the case defined, for the first time, the term "expenditure" for South African Income Tax purposes. It also found that the new definition may have created consequences for the interpretation of other sections of the Income Tax Act.

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.

This dissertation investigates the extent of derivatives use in South Africa. In addition, it examines the effect of derivatives use on firm risk and value. The dissertation is based on a sample of 91 South African non-financial firms listed on the FTSE/JSE Africa All Share Index on the JSE over the sample period 2012 to 2016. Firm risk is measured using total risk, systematic risk and unsystematic risk while the Tobin's Q is used as the proxy for firm value. The results of this dissertation show that 62% of firms included in this sample use derivatives. Foreign currency derivatives were the most commonly used as 80.3% of firms used them followed by interest rate derivatives at 46% and then commodity price derivatives at 21.8%. This dissertation provides evidence that the use of derivatives significantly reduces total risk and unsystematic risk. However, the use of derivative does not have an effect on systematic risk. The use of derivatives increases firm value although this increase is not statistically significant. Overall, this dissertation finds evidence of risk reduction related to derivative usage but fails to establish the value premium that is created by derivative use.

This dissertation seeks to answer two questions. In the main it aims to answer does the section 12J venture capital incentive advance government's original stated intention of incentivizing the provision of equity funds to the SME sector. Based on the outcome of the primary research question the secondary question seeks to answer whether section 12J should be extended beyond 2021. In seeking to answer these questions the dissertation critically evaluates the section 12J legislation, researches the venture capital industry in South Africa including section 12J venture capital companies and investigates the role and success of targeted tax incentives in South Africa. The VCC incentive targeted start-ups and SME's generally considered high growth and high-tech, or junior mining and exploration companies. SME's, especially entrepreneurial businesses, have the potential to be a catalyst for economic growth and job creation. Inter alia, access to finance is stunting the development of the SME sector with up to 70% of SME's failing due to a lack of funding. Venture capitalists can provide equity finance, management and technical support that could reduce some of the high risks associated with SME's. The advantage of equity finance is that it allows the SME's to better weather economic downturns and reinvest cash surpluses instead of servicing debt. In the main, whether the section 12J tax incentive is successfully advancing government's original intention still remains to be seen. Although there has been significant uptake of the regime and evidence to suggest that jobs are being created and meaningful investments are occurring, it still needs to be assessed to what extent the jobs and investments would have occurred even without the incentive. There also remain some short-comings to the design of the incentive and uncertainty to the regime which affects the sustainability of VCC's and the type of investments being made. The VCC industry has evolved to be more conservative, investing into asset-backed businesses and generally providing more growth capital, meaning that start-ups and other industries such as high growth technological companies are benefitting to a lesser extent. As such, government's intention to provide equity finance to start-ups and high growth industries appears to not be being addressed. Due to the late uptake of the regime, it is further unlikely that sufficient data would be available to analyze the incentive before 30 June 2021, the current sunset date. For these reasons, it is the writer's view that Treasury should appoint an external research organisation to prepare a thorough analysis of the incentive and whether it should be extended, but in any event, as a minimum the incentive should be extended for at least another six years (to make up for the years from its introduction to the year it began to show significant uptake, i.e. 2009 to 2015). Alternatively, the section 12J incentive should not be extended but rather replaced with a similar incentive taking into account the recommendations made in this dissertation.

SARS has many powers afforded to it by tax legislation, this dissertation explores the history and development of the powers of search and seizure to determine whether taxpayer's rights are violated when SARS performs search and seizure operations under the Tax Administration Act No 28 of 2011, and whether South Africa requires a taxpayer's Bill of RIghts. / Mini Dissertation (LLM ( Taxation))--University of Pretoria, 2021. / Mercantile Law / LLM (Tax Law) / Unrestricted

The Income Tax Act No 58 of 1962 provides for tax to be levied on an annual basis (i.e. income and expenditure are generally calculated and determined in respect of a single year of assessment). Section 20(1) makes provision for the possibility that the allowable deductions may exceed a taxpayer's income by allowing for the carrying forward of any balance of assessed loss to subsequent years of assessment. It therefore provides for taxpayers to utilise assessed losses determined in previous tax periods against the income derived in future tax periods. Our courts have decided that a company which does not trade during a specific year of assessment forfeits its right to carry forward its balance of assessed loss from the preceding year of assessment. What has been left undecided in our superior courts however (although has been considered in our Tax Courts), is whether a company would also forfeit its right to carry forward its balance of assessed loss in the event where such a company carried on a trade during the current year of assessment, but derived no income therefrom. The primary research question in this study is whether a company would be allowed to carry forward its balance of assessed loss determined at the end of its previous year of assessment to its current year of assessment, in circumstances where it derived no ‘income' from its trading activities during the current year of assessment. This study also considers, as a secondary research question, whether the recent proposals made by Treasury in terms of the Budget Speech held on 26 February 2020, would have an impact on the primary research question. In order to address the primary and secondary research questions, this study considers the wording of section 20 in the light of the guidance on interpreting fiscal statutes as provided by our courts. The study also considers the views expressed in our courts in relation to section 20(1) as well as the relevant commentary on these views. Furthermore, the study considers SARS' view on section 20 as well as whether the recent proposals made by Treasury have an impact on the carrying forward of a company's balance of assessed loss. It is concluded that in terms of the recent proposal made by Treasury, a company whose trading activities result in a loss should be unaffected by the proposed amendments, although this can only be confirmed once the proposed legislation in this regard has been made available. It is further concluded that a superior court has not yet interpreted section 20(1) in terms of the current approach to the interpretation of statutes, and it is submitted that a superior court may come to the conclusion that a company would be allowed to carry forward its balance of assessed loss determined at the end of its previous year of assessment to its current year of assessment, even though it had derived no income from its trading activities during its current year of assessment.

This study investigates the relationship between female board and top management representation and corporate financial performance (measured i.t.o. ROA), and market sentiment (measured i.t.o. Tobin's Q). Three Western nations (the U.S., the U.K. and Germany) and two Asian countries (China and Japan), are considered, specifically with the aim of understanding the nature and extent of the relationship in each region individually, andany potential differences under different cultural environments. The study period was 2014- 2019 for the board representation analysis and, due to data constraints, only 2019 for the top management analysis. Random effects panel regression was used in the board level analysis and a multiple regression model was used to study the top management level impact. The results indicate a positive relationship between the performance measures and female representation at both the board and top management levels. However, the relationship is not statistically significant in the case of the board level analysis, but generally statistically significant for the top management analysis. The strength of the mostly positive relationships between female representation and the performance measures is generally stronger for the three Western countries (particularly for the US and the UK) compared to the two Asian countries, which could in part be due to the impact of cultural differences between them.