MComm, Faculty of Commerce, Law and Management, University of the Witwatersrand, 2007 / In attempting to reform the tax system, the State has often relied on the principles of
fairness (Vivian, 2006: 79). Indeed, part of the motivation for the introduction of Capital
Gains Tax (CGT) was that it could assist with wealth redistribution and bolstering of
State revenue to be used to improve the lot of the poor (SARS, 2001). In turn, this
would, according to the Congress of South African Trade Unions (COSATU), mark the
move to a more progressive tax system that was cognisant of the need for individuals
to bear a proportionate share of the tax burden (COSATU, 2001). The principle of
fairness and equality of taxes touched upon by the trade union and the South African
Revenue Service (SARS) is not a new idea, having been dealt with earlier by
economists such as Adam Smith (1776), and Mill (1848). Smith (1776:V.II.II) Stated
the so-called first canon of tax dealing with fairness as follows:
‘The subjects of the State ought to contribute to the support of the government,
as nearly as possible, in proportion to their respective abilities; that is, in
proportion to revenue which they respectively enjoyed under the protection of
the State. In the observation or neglect of this definition consists, what is called
equality or inequality of taxation’
Approximately six years after CGT was first proposed this research seeks to explain
what is meant by this classical principle of ‘fairness’ and re-examine the debate on
whether or not CGT is aligned with this principle. To place the debate in a more
modern context, it also seeks to consider whether key amendments to the Eighth
Schedule to the Income Tax Act No.58 of 1962 (the Act) have made favourable ground
in remedying perceived obstacles to the ideal of fairness identified when CGT was first
proposed.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:wits/oai:wiredspace.wits.ac.za:10539/8286 |
| Date | 12 July 2010 |
| Creators | Maroun, Warren |
| Source Sets | South African National ETD Portal |
| Language | English |
| Detected Language | English |
| Type | Thesis |
| Format | application/pdf |
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